Nationwide has announced that it will no longer prevent buy-to-let landlords from letting property to tenants in receipt of benefits.
The move comes after NatWest caved in to mounting industry pressure by earlier this month lifting restrictions on buy-to-let landlords renting to DSS tenants.
In October, NatWest's lending practices came under attack after the bank 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.
Paul Wootton, Nationwide’s director of home propositions, commented: “Everyone should be able to access a safe and secure home suitable for their needs but the continued presence of “no DSS” restrictions in the private rented sector denies this right to a group of people who are often in desperate need of somewhere to live. The repercussions of not being able to access good quality housing may leave many living in substandard properties.
“Nationwide is categoric on this issue - we do not place restrictions on landlords that could stop them letting a home to tenants in receipt of benefits.”
Around two thirds of the largest buy-to-let mortgage lenders do not allow landlords to rent property to tenants receiving housing benefit.
However, the Work and Pensions Committee has now written to a number of mortgage lenders about potential DSS discrimination clauses in their lending policies.
Wootton continued: “Recent interest in this issue, most notably from the Work and Pensions Select Committee and Shelter, with whom we have worked closely for a number of years, caused us to review both our own historic lending, and the terms of those societies we took over during the financial crisis.
“As a result, we identified and started contacting around 12,000 mortgage customers to reassure them that Nationwide has never and will never enforce any historic clauses, which might restrict them from letting to tenants in receipt of benefits, which their original mortgage terms may contain.
“The increased focus on this issue is welcome, as are positive moves made by others, and we urge everyone, including lenders, agents and landlords, to consider what they can do to end this unfair approach. Tenants need certainty and consistency and the industry needs a unified approach if we are to make a real impact.
“While it’s imperative that any blanket lettings restrictions are lifted, government needs to ensure that the benefits system works properly to provide confidence for landlords.
“Nationwide believes everyone deserves a place fit to call home but we need a more joined up and long-term approach to ensure this aspiration can be delivered.”
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