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Allowing banks to operate a “no DSS” policy is “housing discrimination”

Mortgage lenders have once again been criticised for not permitting landlords to rent property to people claiming benefits – this time by MPs.

The Work and Pensions Committee is urging the government to address concerns that lenders are increasingly adopting “no DSS” policies.

Research by the Residential Landlords Association (RLA) last month found two-thirds - 66% - of mortgage lenders representing 90% of the buy-to-let market refuse a loan where a tenant is claiming benefit.


The RLA also called on the government to tackle discrimination against benefit claimants after it emerged last month that 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.

The petition has so far attracted 4,857 signatures, which is just under the 10,000 signatures needed to get a response from the government.

Frank Field, chairman of the Work and Pensions Select Committee, commented: “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.”

He added: “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.”

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Poll: Should all mortgage lenders be forced to allow landlords the option of renting property to tenants claiming benefits?


  • Neil Moores

    Clearly evicting Tenants who are paying their rent regularly and on time would be ridiculous. However Banks are working on percentages. They know that their borrowers are much more likely to get into arrears whilst lending to Housing Benefit Tenants, in part due to the changes in direct payments and Universal Credit, but also due to local councils advising such Tenants to stick it out in their properties when they owe thousands and are being evicted for it, building up Landlords' losses and costs. If the "fault" eviction process was speeded up there would be much less of a problem for landlords, which in turn would make lenders more comfortable, and would even lead to landlords being happy to offer much longer tenancies.


    speeding up fault evictions is a nice idea, but face facts it will never happen, so whether the government, councils, or shelter like it or not the policy remains NO DSS , don't take landlords for mugs, we are not, housing benefit tenants = rent arrears, fact.


    Excellent post, 100% right. It’s clear the people who are trying to push this through have never been exposed to the losses that can occur.

    The practice of Councils telling private tenant to “stay where you are” despite not paying the landlord their rent is completely irresponsible. It’s very much a case of, we can’t house you, so stay where you are and the landlord can pick up the legal costs and potential default on his own BTL mortgage.

  • John Cart

    We don't take Benefit tenants, I'm not discriminating against them but I refuse to deal with the hopeless organisations that provide their funding. Sort that out and we may think again, but the REALITY of the situation is that if you let to a Benefit tenant you probably have a 4 or 5 month wait before any rent is finally paid. What other business in the country would be expected to put up with that nonsense.

  • icon

    With my previous business we were asked to go along to a Council meeting along with other local agents to discuss the possibility of working alongside the local autority and posting all our rented properties on the Council website.

    After much discussion someone asked why they had stopped taking on landlords properties for a 3 year period and guaranteeing them the rent for this term, albeit around 15% below market value. The idea was they had control and the LL got his money each month.

    A junior member of the Councils panel jumped in and said "oh, it's because we were having to spend so much money in bringing them back up to standard before we could give them back to the landlord at the end of the term..in some cases around £14,000! Her comments were much to the anger of the senior member of the Council, however the fact is it's true.

    The Council had answered their own question as to why LL/agents we not interested in becoming involved. This has not changed all these years later.

    Once the decision makers put a mechanism in place to make certain tenants wholly accountable for their own actions, then maybe the industry will sit up and take note.

    PS..and that's not we will pay you back £10/month for the next 100 years

  • icon

    Councils are theives!.
    They charge you 100% council tax on your empty property while you have to refurb because last tenant trashed it. If you have a single person living in it they give a 25% deduction but nobody living in it they charge you 100% council tax, ask them to give a genuine simply explanation and they can't, I will never ever take on one of their " clients" again and anyone who does is asking for trouble. Having B2L properties is a business Not a charity.

    John Cart

    There is an answer, it's "because we can and we get away with it". If we have a place empty for a few days I always make the Council write to me three or four times so that their postage and other costs is more than the amount they are collecting, but they still don't learn.

  • icon

    I have nothing but distain for councils and government they simply haven’t got a clue what they are doing and are trying to destroy the PRS by extorting money from every single angle. It beggers belief what’s happened over the last 10 years and they wonder why there is a homelessness crisis. Pay the landlord direct,scrap empty house council tax, get rid of s24 , make it easier to evict non payers and we may be able to move forward all these measures are so easy to implement why are they not doing it ? Useless greedy parasites that’s why

  • icon

    Change the rules and pay all rent (tax payers money) directly to the landlord and the rules may change from a lenders and landlords perspective.

    Evictions would also go down, which would free up more court time too

    Its madness to pay a tenant their rent element and "hope" they pay it out for the cause it was intended

  • Gary
    • Gary
    • 22 November 2018 11:05 AM

    Quite simple economics. The risk imposed on the landlord in letting to a DSS recipient is higher, where there is a far greater risk of the tenant defaulting on their rent. In turn, where a landlord is subject to high risk of no rental income, the bank is exposed to greater risk of mortgage default form the landlord/borrower. Banks are essentially stipulating that landlords must let to tenants where there is a lower risk of default. Granted, not all DSS tenants are high risk, I for one have had some great DSS tenants as a landlord, although over the 10 years of being a landlord, I have lost over £6,000 across only 2 tenants in low value property (

  • James B

    yet shelter attack landlords and agents over this ???!.. clearly their 'donation raising' agenda supporting government comes before dealing with the actual problem to hand here for shelter.


    That's exactly right James. The landlords have no options in most cases "even if they wanted to let to DSS, due to the lenders conditions". But Shelter prefer to LL/agent bash. My previous experience is that Shelter "will not discuss anything" with LL or letting agents..absolutely ludicrous!! This is fact, even when we have been actively trying to assist a DSS or homeless client and have experienced this on several occasions. Tell the homeless this!

  • James B

    Yes shelter are an utter disgrace aggressively going after landlords and agents knowing this is the backdrop .. notwithstanding the fact 61% of them are in arrears according to the RLA .. unbelievable

  • PossessionFriendUK PossessionFriend

    Landlords, NOR Building Societies should be criticised for Business Risk Management.

    If govt want these tenants housed, Then they should pay LHA rates that reflect market rent.


    AND pay it in all instances pay it directly to the landlord


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