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13:36 PM, 14th October 2020, About 4 years ago 74
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Those who believe that Government is not aware of the issues facing landlords in the PRS may be surprised by the detailed analysis in the Briefing Paper published on 13th October by the House of Commons library.
The summary is quoted below but I recommend reading the whole report, which can be downloaded if you click here
“Discriminating against Housing Benefit claimants?
It is not unusual for private landlords and letting agents to advertise properties to let stating that they will not accept applications from people who rely on Housing Benefit (HB) to pay their rent. Despite the Department of Social Security not having existed since 2001, the phrase used in adverts is usually “No DSS”. This has raised the question of whether such restrictions amount to unlawful discrimination. Although unlikely to amount to direct discrimination, as income and employment status are not protected characteristics under the Equality Act 2010, it has long been argued that it could amount to indirect discrimination in some cases.
Findings of unlawful discrimination 2020
In what was described as a ‘landmark’ case, District Judge Victoria Elizabeth Mark sitting in York County Court, considered the case of a disabled single parent who had an application for private rented housing refused by a letting agent based on her receipt of Housing Benefit. In a judgment dated 2 July 2020, which was widely reported in the media on 14 July 2020, she held that the letting agent was in breach of the Equality Act 2010. The judgment declared that:
The Defendant’s former policy of rejecting tenancy applications because the applicant is in receipt of Housing Benefit was unlawfully indirectly discriminatory on the grounds of sex and disability contrary to sections 19 and 29 of the Equality Act 2010.
Reacting to the judgment, Chris Norris, policy director for the National Residential Landlords Association (NRLA) reportedly said:
No landlord should discriminate against tenants because they are in receipt of benefits. Every tenant’s circumstance is different, and so they should be treated on a case by case basis based on their ability to sustain a tenancy.
This was followed by a case considered in Birmingham County Court in which judgment was handed down on 8 September 2020. Circuit Judge and Acting Designated Civil Judge for Birmingham (now High Court Judge), Mary Stacey, held that the letting agency, Paul Carr, had operated a blanket ‘No DSS’ policy which amounted to unlawful indirect discrimination against disabled people.
Why are landlords reluctant to let to Housing Benefit claimants?
Historically, landlords were reluctant to let to HB claimants because of delays in processing HB applications, but since April 2008 a key factor influencing landlords has been the introduction of the Local Housing Allowance and the requirement that this, except in certain specified circumstances, is paid to claimants rather than landlords. Restrictions on the level of LHA paid to claimants were introduced by the Coalition Government in April 2011 – these changes led various housing bodies, including representative bodies of private landlords, to argue that HB claimants were being priced out of the market.
Further restrictions were introduced; for example, LHA rates were frozen with effect from April 2016 for four years. This added to landlords’ concerns about the gap between LHA and market rent levels. Evidence of disparities between actual rent levels and LHA rates payable submitted to the Communities and Local Government Select Committee’s inquiry into homelessness (2016) led the Committee to recommend that “Local Housing Allowances levels should also be reviewed so that they more closely reflect market rents.”
At the start of the fourth year of the benefit freeze (2019/20), analysis conducted by Shelter noted that the LHA rates for a two-bedroom home did not cover the full rent charged in 97% of Broad Rental Market Areas in England.
Other factors cited as reasons for landlords’ reluctance to let to HB claimants include:
The extent of the issue?
There is no definitive information on the extent to which landlords have refused to let to benefit claimants. Reported survey evidence has suggested an increase in the practice in recent years.
Given the increase in Universal Credit claims arising from the coronavirus (Covid-19) outbreak, in June 2020 Shelter raised the potential implications of “No DSS” blanket bans for tenants:
Given the huge rise in the numbers of people receiving housing benefit and what we know about rates of discrimination, we’re concerned that there will be a significant increase in the numbers of people experiencing housing benefit discrimination in the coming months.
As people in existing tenancies tell their landlords they’ve applied for Universal Credit, and those who need to move home begin the search for somewhere to live, renters who are now relying on housing benefit to keep their head above water will be coming up against discrimination.
The likely spike in evictions in the months that follow the lifting of the evictions ban has the potential to exacerbate this further. When the ban is lifted, there will be an upsurge in the number of renters who need to look for a new home. A significant proportion of private renters who may be evicted will likely be receiving housing benefit, especially considering the huge rise in people applying for Universal Credit during the coronavirus outbreak, and so will be met by ‘No DSS’ policies.
In the wake of the finding of indirect discrimination in July 2020, it seems likely that instances of blanket ‘No DSS’ adverts will disappear. However, affordability checks based on a tenant’s individual circumstances will still be possible.
The issue had attracted an increased level of attention in recent years. On 21 February 2019 the Work and Pensions Select Committee launched an inquiry into No DSS: discrimination against benefit claimants in the housing sector – the inquiry had not concluded before the dissolution of Parliament for the 2019 General Election. On 1 March 2019 the then Minister, Heather Wheeler, said the Government was calling for “the end of housing advertisements which specify ‘No DSS’ tenants.” ”
David
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Paul Essex
10:04 AM, 3rd November 2020, About 4 years ago
As a footnote - there is another future risk that keeps lurking in the background.
Council Tax, several think tanks and I believe Labour want to replace Council Tax with a property tax payable by the owner (a nice home owning guarantor!).
This would not be a huge issue for tenants currently paying Council Tax it would just go via the landlord. However if you have UC tenants ( or students) they are generally exempt - but as the property owner we would not be, it could be impossible to increase rent sufficiently to recover the required money from such tenants, leaving us with significant losses.
Yes I may be too paranoid, it may not happen but I fear that the chance for councils to guarantee their tax take will be too tempting for the politicians.
Old Mrs Landlord
16:04 PM, 4th November 2020, About 4 years ago
Reply to the comment left by Paul Essex at 03/11/2020 - 10:04
If you have properties in an area where benefit tenants are not required to pay council tax you are very fortunate. Ours have not been exempt for about five years, although some only pay a proportion of the full rate.
Puzzler
9:50 AM, 6th November 2020, About 4 years ago
Reply to the comment left by Smartermind at 15/10/2020 - 10:59
Most people accept that he is used to include both (all?) genders. I try to use "they" instead but although historically sexist it is not discriminatory.
Puzzler
9:51 AM, 6th November 2020, About 4 years ago
I would accept tenants on benefits on a case by case basis simply because there are one thousand reasons they may get some state help
Vulnerable Tenant
11:20 AM, 11th November 2020, About 3 years ago
Reply to the comment left by Gunga Din at 15/10/2020 - 13:05
What if the tenant has no living family to act as a guarantor, but has an unblemished credit record, a perfect rental history of never missing or being late with a rent payment for as far back as you can go (so maybe 10-15 years that you are able to establish, maybe you can even contact landlords from landlords prior to that), and has a disability? Someone who never smokes, drinks, takes drugs, is very quiet, and keeps a spotless house and beautiful garden. Would you punish them for having no living family? Because when you say “no” to someone simply because they have no guarantor, it’s a huge punishment for someone who has never put a foot wrong. I was just wondering. Thank you.
Vulnerable Tenant
11:30 AM, 11th November 2020, About 3 years ago
Reply to the comment left by Old Mrs Landlord at 04/11/2020 - 16:04
If the tenant is in receipt of the care/daily living component of DLA/PIP, then they are exempt from paying any council tax at all if they live alone, and they aren’t counted if they live with other people. So if they share a flat with one person, that person gets a 25% discount. It used to be 50%. It is called Severe Mental Impairment. It makes a huge difference to me, as I have autism. The wording that is on the form which the doctor signs is quite offensive, but I am so grateful for it. Everyone else on benefits has to pay a contribution towards council tax. It’s not a huge amount, but it is far too much for low-income families, and people struggling on JSA or basic Universal Credit! If you guys have mentally disordered tenants or lodgers in your properties, or vulnerable adults with learning disabilities etc, or anyone you suspect might qualify, you can help them out by phoning the council to get an SMI form. That money can go towards your rent, if your tenant is struggling.
Vulnerable Tenant
11:45 AM, 11th November 2020, About 3 years ago
Reply to the comment left by Kate Mellor at 15/10/2020 - 14:19
I have experienced this first hand more than once Kate. Councils don’t lift a finger to help you to stay in your current home. They WOULD much rather spend about five times the monthly LHA they are paying someone in Housing Benefit, on a hotel for a week! I have just fled a city where I was falsely accused of “making myself intentionally homeless” because I was unconscious in the back of a taxi, and they said me being unresponsive was me refusing to go inside some Premier Inn!! I had a social worker buy a padlock from B&Q to lock me out of my home illegally in June. These hotels are not nice places either. All the council needed to do was to talk to the landlord, who was harassing and threatening me, and warn him off (he broke in twice), and tell him his behaviour was unacceptable, but they refused to speak to him, and the police didn’t do anything either. The council only care once you are literally on the street. They think you are safe and jolly fine until you are actually on the street literally. Even then I apparently don’t qualify for any type of temporary housing, even though Boris gave councils an extremely large amount of money to take in all the homeless who had been put back on the street, like I had, in September, when all this was going on, and is now giving them even more money. So it’s all one big joke.
Gunga Din
11:57 AM, 11th November 2020, About 3 years ago
Reply to the comment left by Vulnerable Tenant at 11/11/2020 - 11:20
The 'rent + deposit in advance + guarantor + referencing' set of basic requirements is surely, for most of us LLs, a starting point. Because demand is not very high in my market I for one will look at extenuating circumstances such as you listed. I might reject someone who ticks all the boxes because I just don't get a good vibe from them, and I rely heavily on the letting agent character assessment too.
I couple of months ago I took on two guys, one on benefits, one working but hardly in secure jobs, neither could come up with a guarantor, because the agent liked the cut of their cloth and they interviewed well. I'd rather have £460 coming in with a bit of unease, than £120 going out in C Tax. Of course only time will tell. So far, so good.......
Vulnerable Tenant
12:53 PM, 11th November 2020, About 3 years ago
Reply to the comment left by AMAZONIA STARBUCK at 15/10/2020 - 17:51
What Annoys Me About Shelter
1. All these campaigns are very well, but we have other charities who do that with much smaller budgets.
2. A lot of what Shelter campaign for are ill-thought out, and actually harm tenants, because they don’t take the time to think out the consequences of their demands of the government and their emails.
3. You can never get through to their telephone helpline. Web chat would be a better option by far. Get rid of that telephone line.
4. There are hardly any solicitors left now-they have shut virtually all of their offices! Their solicitors were there to represent vulnerable people who couldn’t find another one on legal aid. I had one help me once, and he was as honest as the day was long. He got the Judge to give my corrupt, abhorrent landlord a warning to stop harassing me, and prior to that, he protected me from having my rent doubled to force me out of a property! So I was grateful to that.
5. They need to put more advice on their pages, in much more detail, as there is that legal helpline you can call-I forget what it’s called. Begins with C. Shelter’s phone line is a waste of money.
6. One area where the money is really needed is in representing vulnerable people in court who can’t find a legal aid solicitor, and aren’t simply scumbags who refuse to pay rent, and abuse their landlord and/or the property. Helping people who deserve to keep their home to keep it, and to protect them from harm. But not to assist non-payers or rent, or those who cause misery to their neighbourhoods! Yet they are stopping this. Why?
7. If it was advertised and planned properly, Shelter COULD have their own guarantor scheme, just like Guarantid or http://www.rentguarantor.com, enabling everyone in priority need to have a guarantor. Because a charity can’t afford, or be allowed, to lend money to a third party which could then grow into a huge debt, Shelter could operate their scheme in the same manner as the others. Charge tenants a fee for taking it out (depending on credit rating, any history of debt etc), and if the person stops paying their rent and goes AWOL, Shelter find the person and they are responsible to pay that rent, make right any damage, etc. All Shelter would do would be to act as the guarantor, to make sure the rent was paid on time, and to make sure that any damage was rectified. It has been suggested so many times, but Shelter seem deluded as to what landlords and tenants want, and need, them to do.
8. It annoys me also that Shelter have never bought any properties. Why not? I am sure they would get bombarded with donations if they found a suitable piece of land and had a load of flats built on it, which could house, say, 500 people. It could be temporary housing for those who the council have accused of being intentionally homeless, and who have no other place to go, but are too vulnerable for the streets. Then with the rental money from there, plus the increasing donations, they could build more and more of them around the country.
9. They always go on about bad landlords. Yes it’s a problem. I have met several, so I know. Also seen several on tv, like on Nightmare Tenants, Slum Landlords. But they aren’t all like that! What about all of the good ones who get exploited? When will Shelter realise that they exist?
38 degrees’ petitions get further with the government than Shelter do. It’s pathetic.
Chris @ Possession Friend
13:05 PM, 11th November 2020, About 3 years ago
Reply to the comment left by Gunga Din at 11/11/2020 - 11:57If Local Authorities did a Cost Benefit Analysis, they'd find it cheaper to stand as Guarantor than pay the high Emergency Accommodation costs.