RLA call on banks to end Benefits discrimination

RLA call on banks to end Benefits discrimination

9:50 AM, 22nd October 2018, About 4 years ago 5

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The RLA is calling on the majority of Buy to Let lenders to stop discriminating against lending to Landlords that let to benefits tenants in their criteria. They are citing and example where a landlord had their Buy to Let mortgage called in, because it was discovered they were letting to a benefits tenant. Click here to see the full article.

RLA research indicates that two thirds of BTL lenders representing 90% of the market do not allow DSS tenants in their criteria.

The RLA have written to, John Glen MP, Treasury Minister responsible for banking asking for the following:

  1. The Government to use the influence it has in those banks in which it currently has shares to end such discriminatory practices.
  2. The Financial Conduct Authority (FCA), working with the Bank of England, to undertake a full investigation into the extent of this problem and prepare plans to end it. The RLA believes such practices breach a number of principles within the FCA’s ‘Treating Customers Fairly’ agenda.
  3. The Equalities and Human Rights Commission to undertake a review of whether such practices breach equalities law.

Policy Director for the RLA, David Smith, commented: “With growing numbers of benefit claimants now relying on the private rented sector, it is shameful that many lenders are preventing landlords renting property to some of the most vulnerable in society with little or no justification.

“The banks have had long enough to get their house in order. It is now time to take firm action to stop such unjust practices.”

This is after Letting agents and landlords who advertise that they do not accept benefits tenants have been threatened with legal action on the grounds of discrimination by the National Housing Federation and Shelter (see articles below).

Discrimination in the rental sector

NALS rebuke discrimination accusations

However, could this also be inadvertently throwing landlords under the bus that turn down applications for various reasons to benefits tenants?


Rob Crawford

10:17 AM, 22nd October 2018, About 4 years ago

I am certain in this case that the RLA are not acting in the interest of landlords or their mortgage providers. The current stance of mortgage providers takes the heat off landlords who are aware of the risks involved with letting to benefits tenants. They are also very aware of the impact a non paying tenant can have on a landlords own ability to continue paying off the loan. RLA would do better to focus on the root causes. Increase housing benefits to market rates, local authority guarantee, payment direct to landlords etc, etc!

KD South East

10:36 AM, 22nd October 2018, About 4 years ago

This is a long overdue change to end discrimination against benefit claimants in the PRS. Landlords will have greater freedom in choosing who they let to, without being constrained by their lenders rules. They can still turn down tenants who are high risk, or take out additional insurance. With a high proportion of benefit claimants actually being in work this would allow them greater freedom of choice and in particular allow disabled people to access the PRS.

Mark Alexander - Founder of Property118

9:11 AM, 23rd October 2018, About 4 years ago

Why would mortgage lenders voluntarily increase their risk exposure.

The laws as they stand allow bad tenants to ruin good propertites, pay no rent for extended periods and drive landlords into bankruptcy. People on benefits have no money, that is why they are on benefits. If they cause problems for landlords the consequences are minimal. Landlords suffering those put their properties and their ability to pay their mortgages at risk. If landlords and banks take the risk of allowing properties to be let to people with no money there will be more problems.

Why can't the RLA see this?

RLA should be fighting to make things better for landlords, not to expose landlords to greater risk.


13:26 PM, 23rd October 2018, About 4 years ago

This is more of the "just because" line. Some years ago gender based car insurance was banned, unitary rates for life assurance and annuitities, even though apples aren't pears and the only reason my wife is a safer driver is becasue she doesn't whichprobably makes her a higher risk.

The recent case, Feb, I think it was, was decided out of court not on the basis of her being a benfeit claimant but because of indirect sex discrimination (lone parebts being statistically likely to be female) but she had actually been paying the ren t for some time.

So, no blanket ban which will just lead to tougher underwriting.

Appalled Landlord

13:35 PM, 23rd October 2018, About 4 years ago

Reply to the comment left by moneymanager at 23/10/2018 - 13:26

If you are referring to Rosie, Shelter wrote
“Due to childcare responsibilities Rosie now works part-time, and uses housing benefit to top-up her earnings and help pay the rent”

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