Commons Select committee attack lenders no DSS policies

by Property 118

15:03 PM, 21st November 2018
About 3 weeks ago

Commons Select committee attack lenders no DSS policies

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Commons Select committee attack lenders no DSS policies

The Work and Pensions Commons select committee have issued a statement titled “Government must address housing ‘blacklist’ created by lenders’ no DSS policy.”

The Committee published correspondence with Ross McEwan, CEO of RBS, on concerns about restrictions on mortgage lending to landlords whose tenants are in receipt of housing benefit and Universal Credit.

Natwest refused a re-mortgage and threatened calling in the existing mortgage because the landlord was renting the property to a tenant in receipt of housing benefit. The landlord was told that she would have to evict her tenant, a vulnerable elderly lady, or pay the early repayment charges and forego the mortgage as it was the bank’s policy not to allow rentals to a ‘DSS claimant’.

Chair of the Work and Pensions Committee Frank Field MP, said: “The Government claims its welfare reforms are intended to drive employment, but allowing banks to operate a “no DSS” policy is a return to the wicked old days of housing discrimination, with claimants effectively blacklisted for housing and at risk of being senselessly evicted for no greater crime than receiving housing benefit. NatWest is now taking a look at its policy, and other mortgage lenders will no doubt follow suit. If the change we need to protect people is not forthcoming voluntarily, we may need to look to regulation.”

Landlords on Property118 have said all along that one of the barriers to offering longer term tenancies and tenancies to Housing Benefit tenants is the contravention of lenders’ mortgage terms and conditions banning letting to tenants in receipt of housing benefits.

Click here to read the full statement.



Comments

Seething Landlord

17:50 PM, 21st November 2018
About 3 weeks ago

"Landlords on Property118 have said all along that one of the barriers to offering longer term tenancies is the contravention of lenders’ mortgage terms and conditions banning letting to tenants in receipt of housing benefits."
I think two different things are being conflated here - am not aware of any link between (1) the ban on DSS tenants and (2) longer tenancies, except that both are often prohibited by the mortgage conditions.
In the final paragraph of Ross McEwan's reply to the committee he says that they have invited Shelter "to share their expertise as part of our review and we would value their input", so that should be interesting.
He also says that the ban on DSS tenants "reflects evidence that rental arrears are much greater in this segment of the rental market and we are satisfied that this restriction does not contravene equality legislation". I wonder what the expertise of Shelter will have to say about that.

Annie Landlord

18:47 PM, 21st November 2018
About 3 weeks ago

Shelter has already written a blog
https://blog.shelter.org.uk/2018/11/how-much-longer-can-lenders-get-away-with-dss-discrimination/?utm_source=twitter&utm_medium=referral&utm_campaign=DSS_discrimination&utm_content=Post2385_blog_21stNovember2018
The individual case regarding the elderly lady is truly shocking and needed to be publicised. I do wonder about the longer term and wider ramifications though. Lenders still seem to be convinced that tenants in receipt of benefits are a higher risk, so they will have to work with the insurers, otherwise landlords might be free to let to riskier tenants but find insurance cover impossible. I also wonder if the changes BMS apparently made some time ago are retrospective? My mortgage Ts&Cs clearly state 'no ast to benefit tenants' and they've never written to me to inform me of the change

Neil Patterson

8:15 AM, 22nd November 2018
About 3 weeks ago

Reply to the comment left by Seething Landlord at 21/11/2018 - 17:50
My apologies I must have got distracted and didn't finish what I was trying to say, but now added doh.

Sajjad

9:37 AM, 22nd November 2018
About 3 weeks ago

Data from our parent company Landlord Advice UK show that out of the evictions carried out 87% of the defendants where possession was sought were on benefits. Out of the 87% only 8% of the defendants paid the debt as ordered by the court on or before the 14 days.
We do not have any data if the debt was paid after the 14 days.
I went before a judge a claim under section 8 for rent arrears. Defendant did not attend. I sought possession in 14 days which the Learned Judge gave. When it came to the money judgement the judge asked me if I wanted a judgement for the rent arrears and Legal costs. I said no, I did not want a judgement for rent arrears or costs. The Judge said "I presume that's because you know you are not going to get any money from the defendant". The judge was of course right, that's exactly the reason I did not seek any money judgement.
There is no doubt tenants on housing benefit are a high risk and lenders are entitled calculate the risk when lending to investors.

British Landlord Association
Legal Team

Chris Daniel

15:57 PM, 22nd November 2018
About 3 weeks ago

Reply to the comment left by Sajjad at 22/11/2018 - 09:37
If you've paid for a Section 8 Rent Arrears Possession, you might as well ask for Money order, as it will be recorded as a CCJ against the tenant and help future potential landords avoid this tenant.
I cannot see Any benefit in declining something that's part of the process you've paid for, - is this really BLA or their parent eviction companies advice ??? - or just something you decided ?


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