Damon Culbert for InventoryBase considers the issues surrounding the controversial ban on ‘No DSS’.
The ‘momentous’ court ruling making ‘No DSS’ rental policies unlawful comes after several years of numerous charity groups, most notably Shelter, campaigning against its use.
No DSS policies which deny tenants who receive housing benefits were found to be against the Equality Act 2010 because women and disabled people are more likely to receive housing benefit.
This is a welcome step towards housing equality in the private rental sector.
InventoryBase has been discussing the problems with No DSS listings since 2018, so it’s good to see change happening that will benefit vulnerable members of society. With many in the proptech sector, such as Zoopla already having banned them, this marks a progressive step for the lettings industry as a whole.
However, there are understandably landlords who feel this change puts them at a disadvantage when accepting tenants on housing benefits, for reasons that aren’t always within the tenant’s control.
The problems for tenants
In addition to the potential for discrimination against minority groups like women and disabled people, the issue of denying housing to those on housing benefits is far reaching. Those who receive housing benefits have noted that, even with a steady, reliable income and strong references, the blanket policy used by landlords and agents has put them at risk of homelessness.
The claimant in the most recent court case said that she was subject to a no-fault eviction despite having enough money for six months’ rent in advance and references from previous landlords that showed she had never missed rent in the past nine years. When such tenants face insecure housing because of these kinds of policies, it clearly highlights how the system is failing the less fortunate.
The problems for landlords
On the other hand, landlords have recently observed that a ban on No DSS policies could put their income at risk in the future. Many claim that, regardless of the tenant’s reliability, they have problems with the new Universal Credit system that lead to rental inconsistencies. Some landlords have stated that the previous benefit system made it easier for housing benefits to be paid directly to landlords every month to ensure consistency.
Additionally, Universal Credit combines housing benefit with other benefits, making access to housing more difficult for all benefits claimants while also preventing landlords from accessing this fund directly.
Why the timing is significant
With the coronavirus pandemic already wreaking havoc on the economy and even harder times predicted ahead, the No DSS ban is even more significant right now. Economic instability and vast redundancies will result in even more depending on the state for income subsidy. If No DSS adverts were kept in place, this would mean even broader housing insecurity for many.
While this may concern landlords who are now more likely to be serving those on housing benefits, in the face of what could be an even bigger economic crisis than the recession of 2008, the right to housing is more pronounced than ever before. And, as previously mentioned, many of those with access to Universal Credit do still work and receive a salary, using the system to top up their income.
Neither tenants or landlords to blame
Though the policy is discriminatory and this change is an important way to equalise access to housing for some of our most vulnerable citizens, it would be too simplistic to believe this was a battle of tenants versus landlords.
The key challenge facing both groups is the Universal Credit system itself. The 5-week wait to access support means those who are just beginning to receive payments will not have received their first sum by rent day. Making it more difficult for landlords to be sent the money directly also threatens the relationship between landlord and tenants.
If housing insecurity is to be resolved, the system must be adapted to make life easier for both its dependents and third-party providers.
This change in policy will help thousands of those facing hardship and housing insecurity across the country. However, it is only one part of the problem facing Britain’s most vulnerable and the systems in place to protect them must be reevaluated to ensure that the safety nets that are supposed to prevent people from poverty actually work.
With the coronavirus pandemic still influencing our everyday lives, people in every aspect of society should be doing all they possibly can to prevent homelessness.
Comments (19)
“Subject to status” is key. No government has the right to tell a landlord who they may have in their property. The landlord or his agent is perfectly within their right to consider an applicant based on ‘their status’. This is the norm within all walks of life, be it employment, financial services etc etc. The court ruling was over discriminating before establishing ‘status’?
The ‘NO DSS’ used as a blanket blocking was always intended for those social tenants wishing to enter the Private Sector that did not fit the criteria of a PRS landlord. Unfortunately many good tenants on benefits were tarnished by the ‘No DSS’ rogues. All that has now happened is it has gone under ground, just as if you were applying for a loan and failed credit score. You failed but we won’t tell you why, job done.
Landlords are looking for good tenants and one of the criteria for a cautious landlord is reliable, if possible guaranteed income. Benefits are not guaranteed and the benefits system created a worse situation when they stopped paying landlords directly or as in many cases horrendous slow admin (Universal Credit).
A tenant on benefits offers no security of recovery of debts owed to a landlord. Courts of full of tenants walking away owing £millions to landlords every year and no hope of redress. They have no money of their own.
What is ignored by these organisations pushing social housing into PRS is that the benefits system having paid for the rent direct to the tenant, some then uses it for other things and not the roof over their head and as they are not employed, no hope of being ever able to pay the landlord. The benefit system was changed to ignore the fact that the tenants could use the rent money for other things (tax payers money). Rogue tenants milk the system for all its worth, BUT ….
How many people know that although the tenant has been given benefit payment to pay the landlord, if it is found out they have been incorrectly paid or worse not entitled to the benefit …. who do they claim the benefit payment back from. The tenant? NO, from the landlord and if they happen to have other social housing tenants paid housing benefit, they will claim from that pot too! The landlord is penalised through no fault of their own and provided a service through a legal binding contract.
Time this nonsense was stopped. It is time that tenants who act in this way, defrauding the tax payers, benefit system and landlords are treated like any other criminal …. go to jail if necessary, at least they would have accommodation.
The ban on ‘NO DSS’ has created extra work from enquiries of people that some landlords have no intention of renting to. If they don’t fit the ‘status criteria’ required for that particular property it is a very simple to reject but can be time consuming.
…spot on! My last DSS tenants owed a year’s rent before I got them out.
The council offered to pay me directly, but only on the basis that if the tenants were found to have been overpaid, I’d pay it back. I said ‘no’, and those were my last DSS tenants. I didn’t know what the tenants put on their claim form; I didn’t undertake to underwrite the Council’s incompetent staff. What the Council thought was a clever clause has ended up hurting the vulnerable 🙁
You are lucky the Council raised the issue. I’m not sure they have to. They might simply have turned round later and claimed the money from you.
It is crass of Councils and Government to think that landlords will just accept that the rent can be clawed back if unbeknownst to the landlord the Council has overpaid benefits.
…they asked me to sign an agreement which had that clause in it – I tend to read most things 🙂
I advertised a flat to let recently. I indicated I would take DSS because of the Court ruling.
It was a luxury flat, and first, why would someone relying on the taxpayer think that was a suitable place for them?! I told them that I needed proof of income at 5 x annual rent of any guarantor before I’d even start referencing (I asked for SA302s!). This was to get my rent guarantee which requires 2.5 x income for the let, and I assumed another 2.5 x for where the guarantor lived (could me more if mortgage etc. was more than my rent).
I also clustered them with viewings from working tenants so as not to waste too much of my time, but inevitably it was a waste of time for both of us, and an added ‘turning up’ expense for them. The ruling hasn’t helped DSS tenants; not one bit.
Why would anybody waste money on referencing unless they were pretty certain the applicant was going to pass? If the applicants don’t tell the truth well it costs them their holding deposit (but still waste a t least a week of time and costs me a weeks loss of rent). What is happening is passive aggressive bullying by people who have no stake and nothing to loose. Result of Government nonesense means I now vet applicants with very detailed application forms before I will even consider risking money on referencing. If applicants can’t fit the critera required for me to insure them so their rent is guaranteede then their option is to change their lifestyle so they can. I am not unsympathetic and have a disabled step son and the wombats at the DWP regularly review and take away his benefits which are then reinstated once the case is reviewed at the Tribunal. So I know benefits are no guarantee of income. Working people also are a risk as they can loose their job but one has to weigh up the risks.
Indeed goes to show the mistake governments have made in relying on the PRS, you also have to remember even you can have change of circusmstances & could find yourself homeless then see what you think of the PRS, loss of a job, business or a breakdown who knows remember bad luck can happen to anyone
I ask a simple question. I have a property to let. I have in excess of 100 people wanting to view witihin a 2-3week marketting period. I normally take Rent Guarantee insurance having had bad experiences in the past. I have to pay all expenses like referencing since the fee ban legislation. I do not want to pay extra fees and extra complications of referencing gurantors. Even if I was happy to throw more money on referencing and taking gurantors, most guarantors are not happy to put their owned property at risk. Complications arise if they no longer wish to be gurarantors a year down the line but I need a guarantor if I amn to be allowed to continue my RG Insurance. We knowing gaining possession will be made almost impossible with the current Government’s proposals. I am taxed differently due to our so called Government’s own greed and anti landlord policies. I stop to think why so many applicants who can not declare the earning threshold necessary for me to obtain the insurance I usually take out. What do I do? take a bad decision because some so called left wing charity bully me to do so or do I make a reasoned and logical business decision. It is intended I will be publically shamed and taken to court if I (in someone elses opinion) discriminate but is making a logical decision discrimination (using reasoning of normal people and not the Shelter version or the opion of one low level judge) or just plain common sense. Why so many applicants? why such a restricted supply of property? Well landlords are leaving in droves due to Government (National and Local) bully boy tactics spurred on by a so called housing charity, that provides no accommodation and making the provision of housing an hostile environment. Perhaps my decision should be to follow the other fleeing landlords and reduce rental availablity. i.e. Do what the councils have done (assett stripping) and sell off my properties as operating is an hostile environment is hard work, high risk and falling returns.
Answers and the back of stamp please.
Nailed it there…
Indeed it was a huge mistake for sucessive governments to rely on the PRS to supply homes, your right the PRS supplies a house not a home, its short term for the renter and the PRS is never going to be fit for purpose ie housing people long term, for you its an investment for the renter its their home, the two just do not mix or make sense.
For every home sold by a landlord it eaither becomes another BTL or someone renting buys it, the biggest probelm is the renter has to keep on moving every time a landlord cashes in and that is the biggest travesty of the PRS.
A ‘No DSS’ ban in ads changes nothing with the exception of wasting the time of applicants that apply when they have no hope of success in securing a particular property.
It was interesting to hear Polly Neate on Woman’s Hour crowing about Shelter’s success on this matter without acknowledging this point. Yet even more surprising was that she appeared clueless as to why landlords & agents might take this stance, stating ”Far be it from me to say what’s in an individual landlord’s mind”. Instead she accepted the interviewers suggestion that it was some sort of snobbery!
Why on earth does Shelter’s research not list and explore the issues that lead to ‘No DSS’ ads??? If the ‘charity’ was truly interested in addressing this matter then I would expect them to produce a comprehensive analysis of the causes and proposed remedies. Instead it it is just used as another tool to bash the Private Rented Sector.
A point to note there is that the PRS is just that – Private. It is not landlord’s responsibility to act as a social housing provider. That is, or at least should be, Government’s role but of course Shelter won’t miss an opportunity to put the knife in and twist it a little.
Correct that is why sucessive governments should never have allowed or needed to use the PRS, its too important a product to be in the hands of private individuals as you rightly say are not social landlords, a renter is simply a product, governments should have reformed the land compensation act and brought land and become the biggest builder of homes to buy and rent & exclude BTL from that model totally
Biggest HB UC DWP LHA Landlord in Nottingham here.I’m not taking Benefit tenants any more.Please come ask me why. U skirting round the issue.Polly Neates colleague Greg Beales said on public forum a year ago. He was ringing me to discuss. I’m still waiting. Meanwhile 1000’s more Benefit tenants become homeless and can’t get another house.It’s so easy the solution. It’s not the tenants, it’s the UC system and Neil Couling and DWP not allowing UC to talk to very important Landlord who is housing these people in a house that may cost £500+ to run every month. Do u think we giving that away to a UC system where people are trained by Imbeciles? And so Anti-Landlord? Gees, we all know the answers, but Shelter and the authorities won’t come ask us why.I want to take Benefit tenants, I can’t
Tenants offering 6 month’s advance rent yet still claiming housing assistance does not sit comfortably with me and many landlords. Surely these payments are there to cover living costs, not to build up a savings pot paid for by taxpayers? I know of a family, neither parent works yet they live well, have savings and have 3 weeks booked for family holidays to Florida next year including tickets for all the major theme parks. Right or wrong?
Firstly I dont believe you, how do you know they have savings, how do you know they have not been given the money for a holiday, I think you have just made up the story, to fit a narrative.
In my case my parents often pay my 7 months upfront rent rather than be a guarantor which can have serious risks ( ie an open cheque ) it also means I can tell the landlord or letting agent whatever story I like to secure the property as im on benefits, that said ive never not paid my rent in over 20 years of renting.
Ive also had to move many times as the Landlords have either sold or moved back in, now that should be looked at as this created a very insecure existence
Perhaps it was leant to them by a family member. It seems to be the only chance of getting somewhere to live for “DSS” tenants, throwing all the money you can at these biased Landlords.
Landlords are not biased, just realistic and unwilling to risk their livelihoods. Biased means unfairly prejudiced. You need to look at the state of landlord and tenant law. Because it takes so long to evict a defaulting tenant, landlords are wary of tenants who are less likely to be able to pay. Tenants on benefits, as a class, are by definition less likely to be able to pay than those in work.
The problem of benefit clawback would be SUPER EASY for Government to solve. Change the law so that Councils only pursue landlords if they have been complicit in the over-payment.
Instead landlords are faced with increased risk, increased regulation, an unfair tax (s24) and are then told to spend time individually vetting people most of whom will be unsuitable.
The problem at the root of all this is that housing has stopped being a human right and become a “business”. It never should’ve happened. You cannot see it through the eyes of a “DSS” tenant who has never given Landlords any trouble, always paid rent in full and on time, and treated the properties as her own who is rewarded by doors slamming in her face everywhere she turns because she made the awful mistake of becoming too ill to work – something that caused me a breakdown because I never saw me being in that position – and has to now rely on benefits. Doesn’t matter we have a guarantor, doesn’t matter my partner is fit and healthy and looking for work (he stopped after a bereavement that messed him up), doesn’t matter offering higher rent, doesn’t matter having 10yrs excellent references… we don’t even get past that first email or call. Where am I supposed to live when properties are now all investments for those who have been lucky in life and they get the say over who is allowed to have a roof over their heads??
…sorry to hear you are having such a rough time of it, and I sincerely hope your partner gets work soon.
Whilst I can see your point, can you see ours? We know what can be done to relieve the problem (read some of the previous posts), but no one is listening and so nothing is being done. I am surprised that with a guarantor, that you haven’t been able to find somewhere. I had a lady recently who was trying to offer me a guarantor who wouldn’t have got the place for themselves (as they didn’t earn enough), she thought the word ‘guarantor’ in itself was magical. I’m not saying your situation is the same, but if you have a good guarantor who is earning c. 5-10 times your proposed rent, you should email your circumstances to the landlords/agents – e.g.
”I have been renting for the last 10 years, and have been an exemplary tenant. Due to unforeseen circumstances, I am now in receipt of benefits, but my rent will be paid by X who earns £Y pa. I have made arrangements with X that he/she pay you directly, and that I re-imburse him/her. This is to give you the peace of mind that there will never be any Local Authority claw-back (not that it would have ever occurred, but as you don’t know me, you don’t know that).
I really like Z, and hope that I can make it my new home. I look forward to hearing from you.”
The above may get you around the issue of LA clawback, but then there could still be issues of the mortgage and insurance terms that say tenants have to be working, but with a strong applicant, most landlords will overlook the mortgage one, and have a conversation with their insurer.
I wish you good luck.