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Why Are Landlords Reluctant To Let To Benefit Claimants?

The House of Commons Library provides books, journals and online resources for MPs, MPs' staff and parliamentary staff.

Some of this is restricted but some is put online for public consumption too - as is the case with a new and very comprehensive document called: Can private landlords refuse to let to housing benefit claimants?

It’s a useful and thorough potted history of the issue and we have published the summary here.


Over the years, it’s been fairly common practice for private landlords and letting agents to advertise properties saying they won’t accept applications from people reliant on Housing Benefit (HB) or the housing element of Universal Credit to pay their rent.

The Department of Social Security (DSS) hasn’t existed since 2001, but the phrase generally used in adverts is “No DSS”. This raises the question of whether such restrictions amount to unlawful discrimination. 

Although unlikely to amount to direct discrimination, as income and employment status are not protected characteristics under the Equality Act 2010, it has long been argued that it could amount to indirect discrimination in some cases.

Findings of unlawful discrimination 2020

In what was described as a ‘landmark’ case, District Judge Victoria Elizabeth Mark sitting in York County Court, considered the case of a disabled single parent whose application for private rented housing was refused by a letting agent because she received Housing Benefit. 

In a judgment dated 2 July 2020, which was widely reported in the media on 14 July 2020, the agent was held to be in breach of the Equality Act 2010. The judgment declared: The Defendant’s former policy of rejecting tenancy applications because the applicant is in receipt of Housing Benefit was unlawfully indirectly discriminatory on the grounds of sex and disability contrary to sections 19 and 29 of the Equality Act 2010.

This was followed by a case in Birmingham County Court in which judgment was handed down on 8 September 2020. Circuit Judge and Acting Designated Civil Judge for Birmingham (now High Court Judge), Mary Stacey, held the letting agency, Paul Carr, had operated a blanket ‘No DSS’ policy which amounted to unlawful indirect discrimination against disabled people.

Why are landlords reluctant to let to benefit claimants?

Historically, landlords were reluctant to let to benefit claimants because of delays in processing applications. Since April 2008, a key factor influencing landlords has been the introduction of the Local Housing Allowance (LHA) and the requirement that this, except in certain specified circumstances, is paid to claimants rather than landlords. 

Restrictions on levels of LHA payable were introduced by the Coalition Government in April 2011. These changes led various housing bodies, including representative bodies of private landlords, to argue that HB claimants were being priced out of the market.

Further restrictions were introduced; for example, LHA rates were frozen with effect from April 2016 for four years. This added to landlords’ concerns about the gap between LHA and market rent levels. 

Evidence submitted to the Communities and Local Government Select Committee’s inquiry into homelessness over 2016-17 led them to recommend: “Local Housing Allowances levels should also be reviewed so that they more closely reflect market rents.”

Although LHA rates were increased in 2020/21, they were frozen again in cash terms from 2021-22. A coalition of bodies representing private landlords, homeless charities and financial institutions, responded to this decision by issuing a joint call on the Government to publish an assessment of the impact on renters’ ability to meet their housing costs.

Other factors cited as reasons for landlords’ reluctance to let to claimants include:

• uncertainly around the roll-out and implications of Universal Credit;

• the payment of Housing Benefit in arrears;

• restrictions in mortgage agreements and insurance requirements;

• perceptions of benefit claimants as more likely to demonstrate anti- social behaviour; and

• tax changes resulting in landlords focusing on “less risky” tenants. The extent of the issue

There’s no definitive information on the extent to which landlords refuse to let to benefit claimants. The English Private Landlord Survey 2021 asked landlords, from a list of different types of tenants, which, if any, they were not willing to let to. 37% of landlords with five or more properties said they were unwilling to let to people receiving HB or Universal Credit.

In the wake of the finding of indirect discrimination in July and September 2020, it seemed likely that instances of blanket ‘No DSS’ adverts would disappear. However, affordability checks based on a tenant’s individual circumstances are still possible.

The issue has attracted increased attention in recent years. On 21 February 2019 the Work and Pensions Select Committee launched an inquiry into No DSS: discrimination against benefit claimants in the housing sector. 

The inquiry did not conclude before the dissolution of Parliament for the 2019 General Election.

The Government response

On 1 March 2019 then-Minister, Heather Wheeler said the Government was calling for “the end of housing advertisements which specify ‘No DSS’ tenants.”

The housing white paper published in June 2022 says the Government “will make it illegal for landlords or agents to have blanket bans on renting to families with children or those in receipt of benefits.”

A Renters Reform Bill is expected in the 2022-23 parliamentary session.

The full 35-page briefing document can be seen on the House of Commons Library website here.

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    Applyfor rent guarantee insurance. The insurance company will assess the risk and if too high, they won't insure and you have a case to refuse the tenant.

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    I can say very easily why I am reluctant….. my job brings me into direct contact with those on benefits on a weekly and often daily basis. This alone has ( with my own eyes) shown me visions of horror on how a lot of local authority and private premises are treated, I am simply not willing to take that chance…. Never.

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    The whole claimant thing is complicated. I have a very mixed portfolio which includes 6 properties that I choose to let at or slightly below LHA rates. 4 of those properties are currently occupied by tenants with a UC entitlement. Across those 6 properties I am charging more than £1000 a month below market rent. That's a choice I have made that is partially offset by the fact these particular tenants have many years history of proving themselves to be good tenants who take good to excellent care of their homes and almost always pay the rent on time. Late payments are invariably due to problems with UC.

    All 6 of those properties were bought as repossessions or serious renovation projects and I doubt very much if current LHA rates would be sufficient to satisfy mortgage lending affordability criteria on anything fit for immediate habitation at today's prices, unless landlords were willing to put in much higher deposits than normal.

    If we do happen to have a property vacant that we advertise at anywhere close to LHA rent we will be absolutely inundated with applicants, most of which will be fully self funding. Nearly all of them will be frantically trying to find a home and we will hear a whole range of excellent reasons why they should be the chosen applicant: Current landlord selling up and evicting them, relationship breakdown, new job, kids needing to be in the school catchment area, new relationship, unexpectedly being given custody of a child, etc. The list is endless but we only have one property available.

    How do we choose?
    If Letting Agents are involved it will come down to referencing and affordability checks, which claimants are going to struggle to pass. It is unlikely Rent Guarantee insurance would be available and for many landlords that's a risk they won't take.
    If we self manage or use some of the Council referral schemes we have to use our judgement. Having a guarantor possibly helps but isn't cast iron.

    Dealing with the DWP regarding UC claimants is staggeringly difficult. Much, much harder than dealing with the local Housing Benefit staff used to be, so it shouldn't come as any surprise landlords prefer to avoid that added complication.
    So while I wouldn't want to lose any of my existing claimant tenants and have no intention of putting rent up above LHA rates on any of those properties while those tenants want to live there, it is unlikely I would go out of my way to let to any more UC claimants. There are so many self funding applicants to choose from.

    The government are too fond of freezing LHA rates for lengthy periods, the LHA rate is far lower than market rent and the DWP are impossible to deal with. Rents on currently available properties are almost certain to be somewhat higher than LHA rates so if we accepted a UC claimant wouldn't there be a risk we would be condemning them to living in poverty? Would any responsible landlord actually want to deliberately do that to another human being? Councils have a certain amount of discretionary funding but it seems to be erratic in its availability.
    The actual tenants themselves can be great. Like any other sector of society there's good and bad.


    I had this very discussion with myself over my last available property. I wanted to help a prospective tenant who was in emergency accommodation with her 2 daughters but given her LHA entitlement was for a 2 bed and my property was a 3 bed, she would have really struggled to meet her bills even at the below market rent I was asking. I had to advise her in the end to wait for social housing. I then let to a (self funding) blended family with 3 children grateful to move from a 1 bed to a 3 bed. We had another 4 equally deserving families from the 64 applications we had to view the property. The shortage of rental properties in our area puts us in a position of being able to choose (great for us) but doesn't help with the difficult decisions like this. Only an increase in the numbers of social housing options will solve the problem.

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    Very interesting article. We seem to have judges who alter the law, often very similar to government desirable policies. Further the government has been sequestrating property due to the Russian invasion of Ukraine, seemingly without altering the law or compensating the affected victims. Lots of companies have been forced to pull out if Russia to the detriment of the shareholders.
    This is basically what's happening to PRS landlords, the politicians will be very aware that the tenants and the courts will lever their situation to the tenants favour.

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    So we cannot have a blanket ban on benefit claimants , so we will let them view, then if they want to they can apply, but they are always going to fail the affordability checks, rent guarantee insurance will refuse them on the basis of increased risk, we will have to chose our words carefully when we inform them that they have been unlucky , we could I suppose consider them if they could find a suitable guarantor, but where are they going to find one of them ?

  • Matthew Payne

    Still no mention of clawback....

  • PossessionFriendUK PossessionFriend

    The Govt - DWP already in the early stages of Universal Credit, - designed the process to be in contravention to the Private rental sector. - in so much as rent is required in ADVANCE, where UC is only paid in Arrears.
    Furthermore, Shelters own analysis, is that market rent is above the Housing benefit in 97 % of the country.
    Perhaps the govt should look to its Housing benefit cap - freezes between 2016 and 2020, and take some responsibility. !


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