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Mortgage lenders slammed for preventing landlords renting to benefit claimants

The Residential Landlords Association (RLA) has raised serious concerns that the majority of buy-to-let lenders are preventing landlords renting property to some of the ‘most vulnerable in society’.

The RLA is urging the government to tackle discrimination against benefit claimants by mortgage providers after fresh research by the landlords association found two-thirds - 66% - of lenders representing 90% of the buy-to-let market refuse a loan where a tenant is on housing benefit.

The call is being made by the RLA following news that a landlord has had the mortgage on a property revoked because she is renting to a benefit claimant.

NatWest told one landlord that she would either have to evict her tenant of two years, or take her mortgage business elsewhere, after a blanket ban by the bank on benefit claimants.

The bank’s own buy-to-let eligibility criteria notes: “We will not consider multiple tenancies, Homes of Multiple Occupancy, bedsits, DSS tenants or 'Related Person' tenancies.”

The landlord, Helena McAleer, who lets out a home in Northern Ireland, refused to evict her tenant, a vulnerable older woman who always paid the £400-a-month rent on time for more than two years, after being denied a remortgage by NatWest and instead moved her loan to another provider. She has since launched a petition calling for an end to such discrimination.

McAleer said: “I was beyond disgusted by the statement. Actually more than that I cried my eyes out for hours, how could a bank, a person at a bank make the decision that I had to kick someone out of their home simply because of their circumstances, because fundamentally that’s what they are asking me to do.”

In a letter being sent to the Treasury Minister responsible for banking, John Glen MP, the RLA is calling for the government to use the influence it has in those banks in which it currently has shares to end such discriminatory practices.

It also wants 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.

In addition, the Equalities and Human Rights Commission to undertake a review of whether such practices breach equalities law.

David Smith, policy director for the RLA, 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.”

Poll: Do you agree that urgent action is needed to tackle discrimination against benefit claimants by mortgage providers?

PLACE YOUR VOTE BELOW

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    Look at it from the banks point of view, they want their loans repaid, landlords who let to the DSS type tenants suffer the most when it comes to rent arrears, which in tern means many of them find it difficult to keep up their loan repayments.

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