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UK Parliament considers the current position on “No DSS” letting policies

Sian Evans considers the UK government's position on "No DSS" and what the recent publications on this matter mean.

In September of this year, the county court sitting in Birmingham was the second court to rule that a letting policy rejecting tenancy applications on the basis that the applicant was in receipt of housing benefit was unlawful and in breach of the Equality Act 2010.

Now, the UK Parliament has published a briefing paper in summary of this issue. It considers the reasons why private landlords are reluctant to let to prospective tenants in receipt of housing benefit and the action being taken to challenge those who operate “no DSS” policies.

Why are landlords reluctant to let to housing benefit claimants?

The paper highlights some of the key concerns for landlords when considering whether to let to prospective tenants in receipt of housing benefit. These include:

  • Direct payment of housing benefit to claimants. The paper refers to the English Private Landlord Survey conducted in 2018. 65% of participants said that they would be encouraged to let to housing benefit applicants if the benefit was paid directly to them;
  • Administrative delays in processing and receiving payment;
  • The gap between rent and housing benefit levels. In some areas rents are significantly higher than the corresponding level of housing benefits. This is believed to act as a disincentive to private landlords as they are concerned that tenants will accrue arrears or that they will receive pressure to lower rents for those in receipt of housing benefit;
  • The perceived association of tenants in receipt of housing benefit and anti-social behaviour. The English Private Landlord Survey 2018 found that around 50% of agents and 55% of landlords surveyed stated “disturbance or anti-social behaviour” as a reason for not letting to those in receipt of housing benefit; and
  • Restrictions on mortgage agreements and insurance requirements. A survey conducted by RLA’s mortgage consultants in 2017 found that “two thirds of the largest buy-to-let mortgage lenders do not allow landlords to rent property to tenants receiving housing benefit”.

Current position

The paper indicates that a landlord’s refusal to let to prospective tenants in receipt of housing benefit is unlikely to amount to direct discrimination, as income and employment status are not protected characteristics under the Equality Act 2010.

However, although the “no DSS” policy may not be discriminatory itself, it can still cause indirect discrimination, if it is likely to impact disproportionately on people who are protected under the 2010 Act. An example of this was the case of Tyler v Carr. Tyler was a disabled man and therefore protected under the 2010 Act. Shelter’s statistics showed that 45% of private renters who claim disability benefits, also claimed housing benefit. The no DSS policy was therefore found to be indirectly discriminatory because it disproportionately affected disabled people.

The paper does however note that indirect discrimination can be lawful if the person discriminating can show that it is a proportionate means of achieving a legitimate aim. The example is given that a landlord whose mortgage lender has imposed a condition not to let to housing benefit claimants may cite this as a reasonable justification. However, it is for the courts to decide what factors, if any, amount to a proportionate means of achieving a legitimate aim in this context.

The cases heard so far were in the county court and do not therefore set a legal precedent. However, the report suggests that the Government may be calling for an “end of housing advertisements which specify ‘No DSS’ tenants”.

In February 2019, the Work and Pensions Select Committee launched an enquiry into “No DSS: discrimination against benefit claimants in the housing sector’. They wrote to various bodies, which subsequently led to companies such as Zoopla removing ‘No DSS’ wording from their rental adverts and NatWest advised they would end restrictions on buy-to-let mortgages.

On 1 March 2019, Minister Heather Wheeler stated that ‘In the coming months, ministers will meet leading industry representatives, including mortgage providers, landlord associations, tenant groups, and property websites to clamp down on blanket exclusions in adverts – with a view to stopping them altogether’. The committee’s enquiry had not concluded before the dissolution of Parliament for the December 2019 election, but this does not appear to be the end.

The paper refers to the more recent statement of Will Quince dated 19 March 2020, in which he said that they will continue to monitor the situation regarding ‘No DSS’ polices and continue to engage with stakeholders where necessary.

Read the UK Parliament's briefing paper at your convenience.

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