Discrimination against tenants who claim housing benefit, which frequently surfaces as ‘no DSS’ in rental listings, has generated a significant volume of political, media and industry debate this year.
We initiated our own investigation in March, ultimately banning such ‘DSS restrictions’ across our portal.
We led the sector in our approach, inciting change amongst our peers, while aligning with other prominent businesses such as the banks, namely Metro and NatWest, and charities such as Shelter.
We shone a light on this insidious issue and didn’t shy away when it became divisive.
It is Zoopla’s position that each tenancy application should be assessed individually.
In an era of housing shortages, population growth that outpaces the speed of new homes construction, and local authorities leaning on the private sector to house their tenants, the need to unlock access to rental stock has never been greater.
Furthermore, ‘no DSS’ is an antiquated term – despite being entrenched in the lexicon of our industry. Lest we forget that the Department of Social Security was replaced by the Department of Work and Pensions in 2001.
Using the right terminology is essential – particularly if the issue is ever to progress; indeed, I will refer to ‘housing benefit discrimination’ for the rest of the article.
Admittedly, our corporate position is not (yet) enshrined in law; however, since March, guidance on the legalities has evolved, and it’s vital for those in the sector to understand the implications.
To recap, in March the Ministry of Housing, Communities and Local Government announced plans to evaluate rental adverts that potentially discriminate against would-be tenants in receipt of housing benefit, and stipulated that these should end.
In early October, the Competition and Markets Authority (CMA) issued fresh guidance to lettings professionals, which puts a stop to housing benefit tenant exclusions, stating: “The inclusion of housing benefit claimants as an example does not justify or excuse letting agents or property portals [who impose] blanket bans against those on housing benefit.”
This not only covers how a property is presented on a portal, but also extends to all letting agent communications with customers, including on websites, in emails and verbally.
In our view, the guidelines are clear: blanket bans (where there is no specific restriction on the landlord) are not permissible, and the CMA expects those in the industry to police and uphold such principles.
The CMA also says it “would be concerned if terms that specify that a property cannot be occupied by a person in receipt of housing benefit are currently included in any new contracts”.
Whilst this was said in the context of lettings contracts, it’s potentially a matter of time before the CMA extends its guidelines to encompass buy-to-let mortgages and mortgage lenders.
That said, the CMA does draw attention to certain exemptions, citing clauses in a contract, such as a mortgage that specifies that a landlord may not let a property to those in receipt of housing benefit.
In such instances, it must be brought to the attention of prospective tenants sensitively and accurately.
In summary, the new guidance indicates that all tenancy applications should be assessed on a case by case basis. In practice, this also means that lettings professionals should avoid behaviour and language that discriminate. Phrases to avoid in communication include, but are not limited to:
– No DSS
– No DSS or Housing Benefit Applicants
– At this time, the vendor does not accept applications from individuals in receipt of DSS
– Working professionals only
– Working or retired tenants only
This consumer protection legislation is complex, so if there are doubts about communicating the details of a property, do seek clarification from the CMA directly.
For agents – and landlords – in contravention of the rules, the CMA can impose (potentially hefty) fines; indeed, the CMA states that those in breach can be “punish[ed] by a fine of any amount”.
Fundamentally, there is no place for discrimination in the housing market.
All tenants in receipt of housing benefit, who are looking to rent a property, deserve the chance to be fully assessed for their suitability and matched to a home that suits both their needs and their landlord’s circumstances.
We hope to continue working with Shelter, the MHCLG and other stakeholders to address the pain points of landlords.
This extends beyond the decree of mortgages and insurance policies; it involves addressing the ramifications of Universal Credit, and what happens when a tenant’s status changes.
Ultimately, we must address the deeper workings of the system.
* Charlie Bryant is managing director of Zoopla
Comments (19)
N.B. All tenants must be capable of passing a standard affordability check which has traditionally limited the monthly rent to 1/30th of their annual income. All tenants are advised that rents in excess of this will require a guarantor to underwrite the tenancy.
Sorry Charlie Boy, that clause on every set of details just gets around any attempt to tilt the PRS in favour of government subsidised tenancies
Since when have Zoopla we pay have the right to say what we can or cannot do!
There are two distinct issues here, which is totally ignored. Landlord wish to let their properties in Private Rented Sector or Social Housing Sector.
Using SHS rules in PRS is not workable and is state intervention, currently banned by EU Regulations.
No DSS is not discriminating, unless one wants to hijack political ideology. The landlord in PRS has the common law right to say who he rents to, often has conditions dictated to by third party liabilities i.e. insurers and mortgage security.
The landlord and an agent has a duty of care to advise prospective tenants as to their suitability prior to viewing. Stupid to say, yes you can view, you will be wasting your time and ours as we can’t rent to you because our insurance or mortgage covenants say no. AND as it takes months to sort out your Universal Credit and Housing Benefits … you aren’t getting rent free accommodation to find out you don’t qualify or not enough to pay the rent.
Therefore landlords should have the right to say they are providing accommodation for either PRS or SHS.
We now ask for guaranteed income for PRS landlords. DSS or whatever you wish use for it, is not guaranteed income and we have landlords in SHS, a high percentage often high risk for keeping rent from HB and causing damage into £k’s because they have no commitment to provide out of their own pocket, have no pocket to chase and do they know it!!!.
Do you think that Zoopla would be happy to offer free listings to any agent who said “universal credit welcome”? That would be a good moral position.
The fact is, with the role-out of Universal Credit there will be no housing benefit claimants for agents to blanket ban very soon, unless they intend to ban everyone in receipt of UC (which will be impossible if they want to have any tenants at all). “The times they are a changin’…”
Research shows that 90% of those on benefits do not object to ‘no Dss’-type messages. They want to know who genuinely will accept them as applicants. This will now just waste the time of everyone – including the time and money of applicants who may have to travel to view properties that they will not be accepted for. Shelter has led this campaign to force landlords and letting agents to get rid of these messages, despite the fact that those they purport to advocate on behalf of don’t want this.
Tenants on benefits also can’t afford to rent the vast majority of private rented houses. This has always been the case as landlords on the whole did not set up their businesses as charities to house this sector with them subsidising the rents from, for example, their savings – a model which would be unsustainable and pretty soon lead to bankruptcy. Those on the lowest incomes were traditionally housed by the state. The latter has now decided that because they sold off this housing and failed abysmally to replace the sold housing, the PRS must be force to house them, despite the fact that the benefits don’t cover the rent. It’s pathetic.
Well, what a lovely chap Charlie Bryant is or will it soon be ‘Sir’ Charlie? What a sickening load of **** he is talking!
There is a housing crisis in the South East of England and that’s because of continued short-sighted government investment policies which drive more and more people from the north to seek work in London and the South East. There are parts of the north where house prices are actually LESS than they were 10 years ago.
This guy is just the latest to jump on the Let’s Bash The Landlords bandwagon. Why the hell does he think landlords often have concerns about letting to DSS tenants!? Although many make perfectly decent and reliable tenants, they are more likely to be difficult and to stop paying rent. And why does this idiot think that building societies often actually prohibit landlords from letting to them?
It is not private landlords’ job to house DSS tenants, it is the government’s job. I hope agents will boycott Zoopla in protest.
Interesting view; is the fee paying agent the customer or the potential tenants and landlords who view for free that Zoopla should be supporting?
“We led the sector in our approach, inciting change amongst our peers, while aligning with other prominent businesses such as the banks, namely Metro and NatWest, and charities such as Shelter.
We shone a light on this insidious issue and didn’t shy away when it became divisive.”
Seems an odd tone to adopt when addressing the fee paying customers who arguably will be most disadvantaged by this stance and in reality maintain the existence of his business.
With such a major change in policy, should Zoopla not have offered all existing Agents an opportunity to leave Zoopla with no penalty?
Perhaps Mr Bryant, as correct as view his view might be, give more thought and consideration to his audience before he embarks on further efforts to address” The pain points of the Landlords”.
Perhaps a little less discrimination in favour of Tenants and Landlords against fee paying Agents might be in order.
Just a suggestion.
How about including the income requirement in adverts so tenants who are in receipt of Housing Benefit and /or Universal credit do not become disillusioned by making lots of calls for property, only to discover their ineligibility?
Bullying and bull **** by those not risking their investment. The politically correct bully boys should be asking WHY landlords are not wanting to take benefits tenants. Zoopla are playing to their puppeteers. Local authorities mislead and work against landlords. DWP are either corrupt or wholly incompetent when assessing applicants. Policies like claw back when tenants are dishonest cost landlords. STOP misleading the people you need to work with if you want landlords to help house the people GOVERNMENT AND COUNCILS have forced into being marginalised or house them yourselves. The Dictator approach is not the solution.
Be that as it may. If you have a choice between somebody in receipt of housing benefit or a working individual we all know the safer bet.
Pressure groups and the government have made lettings a minefield in recent years and if not particularly profitable if you have a mortgage. The last ll need is universal credit being stopped and rent missed / short.
Housing benefit will not exist shortly, with everyone on universal credit, some 90% of whom will be in full-time employment. Lazily blanket-banning anyone in receipt of UC won’t be an option any more.
99.9% of these DSS and or DWP claimants etc will never pass the referencing criteria. So agents don’t have anything to worry about apart from taking these crappy calls and saying “do you earn 3 x yearly rental” etc
If tenants don’t pass the criteria they not coming in.
This T*** at Zoopla is trying to be PC – plus the article was too long to read and boring.
Such a short sighted, ignorant and assumptive reply that is. It’s not being PC; it’s being morally correct. Every person in these islands deserves an affordable home; having No DSS on listings is so out of touch with the reality and struggles of the property market.
You need to look at WHY there is a problem. Then correct the problem not just try to bully landlords into dancing to the tune you want them to dance to. Why do landlords not want benefit tenants? Read the landlord blogs and you will understand why. Then decide who is short sighted, ignorant and assmptive. The bully boys who invest in bad mouthing landlords or those who invest their hard earnt money in providing housing? Many of whom are now leaving or considering leaving the market which will make matters worse for those needing housing.
Sheepman, I agree everyone derserves a decent home but is that the responsibility of the Private Landlord who appears to be the villain or should it be the Government’s role to fulfil a social need?
Mythoughts it only appears to be the landlord is the villain because of the fake news and propoganda put out by government politicians, media and other rogue organisations. if the reason is not understood the incorrect conclusion is arrived at.
Not true. The overwhelming majority of UC claimants will be in full-time employment, and they’ll represent such a high proportion of potential tenants that a blanket ban will be unworkable. You can kick-off all you like, but housing benefit is on the way out so the only way you’ll be able to differentiate between people is to reference them individually.
You are right about referencing them but as a landlord I am not prepared to reference a dozen prospective tenants AT MY COST so earlier sifting is essential. This is the consequence of shelter lead policies (fees ban) and suspect politicians seeking votes.
I think you’re right, but gone are the days when using receipt of benefits as a blanket disqualifying criterion will be workable. It just means that agents are going to have to work harder to dig into individual applicants’ circumstances to determine their suitability, which is ultimately what you’re paying them for. Nobody wants tenants who aren’t going to pay the rent or are going to trash your investment, it will just be down to the agent to use a bit more nous to make that determination of risk on a case-by-case basis. In my experience, spotting a ******* is a skill one soon develops, and whether or not they receive benefits/tax credits is a pretty poor indicator of whether the property is going to be looked after and the rent paid. A young professional couple who earn plenty of money but go mad at the weekends might well be far worse tenants than a family on a tight budget which includes some benefit income who habitually watch every penny. Credit history is a far more reliable indicator of whether tenant is likely to get into trouble and not pay the rent, while other individual judgements are a bit more subjective. Ultimately, what landlords and agents want is properties filled with stable, reliable tenancies. Would you want your property sat empty, costing you money, while your agent is turning away honest, respectful tenants who’ve never missed a month’s rent on the basis that their income is topped-up by benefits?
So, we all wait with baited breath for the banks who are apparently happy for mortgage holders to take a risk, to start cutting out the middle man and offering those on universal credit mortgages to buy their own properties.