Equality laws could affect “no benefit tenants” policies

by Property 118

10:52 AM, 26th February 2018
About 7 months ago

Equality laws could affect “no benefit tenants” policies

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Equality laws could affect “no benefit tenants” policies

Lettings agent Nicholas George recently admitted indirect discrimination on the grounds of sex, settling out of court with single mother Rosie Keogh. She was paid £2,000 compensation, because her application was refused on the grounds of being in receipt of benefits.

The action was reported today on the BBC news website (Click here to read the full story) stating: “The thousands of lettings agents and landlords around the country who reject housing benefit claimants could be flouting equality laws, due a recent legal case.

Rosie tried to rent a property in Birmingham and was turned down after revealing some of the rent would be paid by housing benefit. She immediately  made a complaint on the grounds that single women are proportionately more likely to be claiming housing benefit than single men.

The agents dismissed Rosie’s complaint, which as a former paralegal she took to county court establishing the principle of sexual discrimination under the Equality Act. Rosie told the BBC: “I felt something had to be done to challenge it. I was motivated by anger at such inequitable practice.

“It made me feel like a second-class citizen. You are being treated differently and it’s women and women with children who are bearing the brunt of this because they need to work part time.”

A Shelter survey last year of 1137 private landlords found 18% preferred not to let to benefits claimants and  43% had a blanket ban.

Shelter’s legal officer commented:”By applying a blanket policy they are actually preventing good tenants from accessing the private rented sector.

“Women are more likely to be caring for children and therefore working part-time and are therefore more likely to top up their income by claiming housing benefit.”

The NLA head of policy, Chris Norris, responded to the case saying: “Cases like this highlight the very worst of what a minority of renters have to put up with when looking to secure a home in the private rented sector.”

“The number of landlords willing to rent to housing benefit tenants has fallen dramatically over the last few years, because cuts to welfare and problems with the universal credit system are making it more and more difficult for anyone in receipt of housing support to pay their rent on time and sustain long-term tenancies.”



Comments

Mark Alexander

11:18 AM, 26th February 2018
About 7 months ago

Could most people be missing the point here?

Isn’t the point that we should consider all applications equally rather than simply saying No DSS? That organisation hasn't existed for years now by the way!

If our policy was that we only accept tenants who qualify under referencing to the extent that we are able to purchase Rent Guarantee Insurance (RGI) then surely we would be OK?

That has always been my own position. I never refuse to consider people on benefits, but I do explain that without a homeowner guarantor who has a regular income it is unlikely that my insurers will accept them, and if they won’t take the risk then neither will I.

Naturally, I will never discriminate but I will choose the tenant which I believe best matches the level of risk I am prepared to consider. I consider myself risk averse by the way, but some of my friends and family think I am completely bonkers for having taken so many risks in terms of borrowing money to buy rental properties in the first place. It's all relative I suppose.

Gromit

11:38 AM, 26th February 2018
About 7 months ago

Perhaps it is the benefit system that is discriminating against men, and denying men from claiming housing benefit.

Dr Rosalind Beck

11:44 AM, 26th February 2018
About 7 months ago

Reply to the comment left by Mark Alexander at 26/02/2018 - 11:18
But Mark, asking for a guarantor could also be deemed to be indirect discrimination if it can be proved women or black people or disabled people etc find it harder to get a guarantor. People in these categories will in general be poorer than others and thus less likely to have someone who will act as guarantor. I think this could have huge implications much more widely than in housing.

moneymanager

11:51 AM, 26th February 2018
About 7 months ago

Is the prospect's gross annual income 30 times the monthly rent? Denying a tenant on such a basis universally prevents them from getting into debt.

Luke P

11:54 AM, 26th February 2018
About 7 months ago

If 'discrimination' is not direct, I would argue that it is not discrimination at all... It relies on stats being in your 'favour' at that particular given moment. What would happen with regards precedent if there were a seismic shift to majority males claiming benefits or a majority of one particular race group?

Mark Alexander

11:56 AM, 26th February 2018
About 7 months ago

Reply to the comment left by at 26/02/2018 - 11:51
That is a general rule of thumb and a very good one, used by many tenant referencing and RGI providers I believe.

It is common sense, just as limiting mortgage borrowing to multiples of income is also common sense.

Affordability has nothing whatsoever to do with discrimination.

When the day comes that discrimination on the grounds of affordability exists the world will have gone well and truly mad and I will either own everything of mega high value which is for sale in the the world or sue every lender that refuses to lend me the money to purchase whatever the hell I want!

Susan Bradley

11:58 AM, 26th February 2018
About 7 months ago

My buildings insurance does not cover me if tenants are not working unless retired or claiming disability benefits so it’s out of my hands?

Whiteskifreak Surrey

12:01 PM, 26th February 2018
About 7 months ago

I have replied to that BBC article (on a form below it) along these lines:
"Maybe it is worth asking why Landlords do not want benefit tenants? From statistical point of view benefit tenants are more likely to run into arrears, damage the property (repairs sometimes worth thousands of pounds), not move out when served eviction (most of them will follow Shelter advice and live rent free to up to 40 weeks), effectively stealing from landlord.
Perhaps biased BBC should also consider the recent war on landlords leading to eviction due to selling or to substantial rent increase, caused by idiocy of Section 24 (tax on fictitious profit). Would HB tenant be able to afford such increase? This is forward thinking on the home provider's side.
BBC seems to forget that majority of lenders prohibit benefit tenants. Maybe Government should address that issue first? The government who would work with LLs and banks to provide an inexpensive mortgage on condition that the property will be rented to benefit tenants and rent will be paid directly to landlord will have a big win in election. But of course the need of rich cronies have to be addressed first. Tenants in a grand scheme of things do not really matter much to the Government"

Dr Rosalind Beck

12:03 PM, 26th February 2018
About 7 months ago

Reply to the comment left by Susan Bradley at 26/02/2018 - 11:58
Yes Susan. And lenders can also stipulate this. We could get caught between a rock and a hard placentre. Similarly, I would like to know what Scottish landlords are doing now that they have to offer open-ended tenancies - when many will have lenders who only permit maximum 12 month tenancies.

Richard Mann

12:11 PM, 26th February 2018
About 7 months ago

Reply to the comment left by Mark Alexander at 26/02/2018 - 11:18
Hi Mark,
That’s no always possible as very often Lenders stipulate that a tenant must be a professional person, the application as you know asks the same question “ will you be Letting the property to professional people?”
Ironically the day after the “professional” tenant signs the contract for a minimum of 6 months they could lose their jobs and claim allowances.
The Landlord is now committed to Letting to a person on allowances in direct contravention to terms of the Loan.
What then?
If the terms that have now been broken where to be enforced the Lender could ask for the full loan amount to be repaid immediately.

Landlords eh !! Caught between a rock and a hard place as usual ...

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