Campaigns Welfare Reform and Homelessness

No DSS summit: RLA in Downing Street talks

Sally Walmsley
Written by Sally Walmsley

The RLA has attended high level talks at Downing Street on ending discrimination against housing benefits claimants.

Policy manager John Stewart was at Number 10 yesterday to discuss the issue of ‘no DSS’ advertisements – just months after the government announced letting adverts which potentially discriminate against would-be tenants on housing benefit should end.

The RLA has been campaigning for change for some time and has worked with high street bank Nat West – which announced it would lift restrictions preventing landlords with its buy-to-let mortgages renting to benefits tenants earlier this year.

Metro Bank has now announced it will follow suit, with Zoopla already pledging to remove ‘no DSS’ advertisements from their sites.

Roundtable

Yesterday’s roundtable at Downing Street led by Housing Minister Heather Wheeler MP was organised as part of the government’s pledge to tackle the stigma experienced by tenants on benefits and was leading industry bodies and companies.

The government has said that while the vast majority of the private rental sector provide a fair and professional service, the government has been clear that ‘No DSS’ has no place in a modern housing market and is determined to introduce a blanket ban.

Complex situation

The RLA has reminded landlords they should not impose blanket bans – but said the situation remains a complex one – and that more is needed to address issues of affordability in the sector.

RLA research found the average amount owed by Universal Credit tenants in rent arrears increased by half in a 12 month period, from just over £1,600 in 2017 to almost £2,400 in 2018.

This has left some landlords feeling wary when it comes to lending to benefits tenants – with other landlords’ hands tied due to mortgage conditions.

Further research by Manchester Metropolitan University for the RLA found 53 per cent of landlords reported that the gap between the Local Housing Allowance and local market rent was more than £50 a month. Almost 25% said the gap was over £100 a month.

John Stewart said: “The RLA has been working tirelessly to help landlords who do want to rent to tenants in receipt of benefits, but who have been restricted by mortgage conditions, something which is now being addressed by the industry.

“The real issue is affordability. The RLA believes the government now needs to end the freeze on Local Housing Allowance (LHA) rates, which has left benefit payments bearing little resemblance to market rents.

A step forward

In statement released after yesterday’s meeting Housing Minister Heather Wheeler MP said: “Regardless of financial circumstances, everyone should have the same opportunity when looking for a home and I have been determined to end the discrimination those on benefits face.

“Today’s meeting was yet another step forward; marking an important shift in making the private rented sector fairer for all – and I am thrilled that Metro Bank have decided to join us in ending the stigma surrounding tenants on housing benefit.

“I am grateful to those companies for taking the time to discuss this issue and look forward to us continuing to work together.”

Minister for Family Support, Housing and Child Maintenance, Will Quince added: “We are working to bring the sector together to tackle this issue, ensuring everyone has the same opportunity to access safe and secure housing.

“It’s encouraging that we’re already seeing positive changes being made in the industry, and we continue to encourage landlords and agents to consider tenants on an individual basis.”

About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Communications Manager for the RLA and award-winning Editor of RPI magazine. With 16 years’ experience writing for regional and national newspapers and magazines she is responsible for producing articles for our Campaigns and News Centre, the weekly E-News newsletter and editorial content for our media partners.

She issues press releases promoting the work of the RLA and its policies and campaigns to the regional and national media and works alongside the marketing team on the association’s social media channels to build support for the RLA and its work.

18 Comments

  • I let HMOs in the West Midlands and the issue with DSS tenants is getting paid and the tenants themselves. Affordability is not the main issue . It takes on average three months to get paid universal credit and 80% of my tenants keep the first payments . We would be prepared to take more DSS tenants if we could get speedier and direct payments. Why was this not mentioned ?

    • Hi, the meeting was very much about what the sector could do, rather than government, but we, as always, continue to highlight the issues around the Universal Credit process, as well as affordability, which is a real issue in some areas.

  • Personally I feel that the “No DSS” adopted by most landlords is for three reasons alone:
    1. The Universal Credit policy of no automatic direct payment to landlords
    2. The cap on the LHA rate
    3. Most unemployed tenants are more demanding than those who are in employment
    Landlords who in the past decided to take unemployed tenants did so accepting point three but knowing that they would receive the majority of the rent most of the time.
    So until the Government addresses the issues raised with points one and two most Landlords will continue to avoid DSS tenants.

  • This is all very politically correct & makes for great sound bites, but nobody is seeing the elephant in the room. If I select a tenant, and they default, the guarantor is expected to pay. Both have had to undergo credit checking (now at my expense), which makes the situation mine in the making. I effectively have made the wrong choice & have to suffer the consequences of taking court action to recover unpaid funds. I’ve had one “DSS” tenant that voluntarily gave up control of payments as she knew she couldn’t manage her finances. One day the payments just stopped coming. Why? After spending ages making calls, I found the system had changed, no notification or communication had come from the authorities & I could do nothing about it. 7 months & 2 court dates later she was evicted. It took a 3rd court date to recover the thousands owing from her guarantor to resolve the situation. The point I’m making is that, if ministers want to push us into taking benefits tenants then they need to offer us the DWP as a guarantor for all outstanding rent & damages payments, in the same way that a personal guarantor is offered now. We need the power to take the DWP to a claims court if they don’t pay. Otherwise how do we know that the next PM / housing minister / some other political entity looking to score brownie points, won’t again change the system, leaving landlords out in the cold? It’s the governments & agencies I trust less than benefits tenants! They can change the rules to suit political whims, at any time, leaving us lot to suck up the loss. Not very fair is it? Oh, and by the way, all in all, the court cases I mentioned left me just over £1000 out of pocket, just because the benefits agency changed their practices. Oh & the tenant? Luckily she had family to put a roof over head, otherwise, she’d have been homeless, low on the priority list for emergency accommodation. Doesn’t exactly give a landlord a warm feeling inside when that happens. So, RLA, benefits agency & all concerned, here’s the elephant in the room. Anyone wanna get it out so we can move on?

    • Agree with this. The whole system needs an overhaul including:

      Rent paid directly from DWP
      Rent paid at market rates
      Rent paid upfront in line with contract
      And as you suggest, DWP as guarantor
      Insurance and mortgage lenders who do not discriminate (or charge extra) for letting to HB tenants

      Until all of these things are in place its a non-starter from my perspective.

      I’m at the point of being sick of all of the sound bites and campaigns waged against landlords who are for the most part decent normal hard working people who carry all of the risk associated with letting property.

  • Whenever I have to renew my landlord’s insurance policy, I am being asked if my tenants are on benefits or are they, professionals. the government should target this as well.

  • Totally agree with all of your comments above. We are not in the business to discriminate, but our hands are being tied not only by insurance companies but with constant anti-landlord legislation, S24 tax, Selective Licensing that we have to pick the very best tenants based on their income. When are the Central/Local Government, Shelter, Generation Rent etc.. going to see that all their policies are not helping tenants but hurting tenants. My costs increase and therefore my rents increase. I never used to increase rents to tenants in situ but have been increasing rents for the last 4 years due to these very policies. For the tenants sake, I ask these organisations to work with us not against us as they have been doing. I’m getting to the point where I don’t see the point of keeping my 6 properties after more than 20 years of renting. It is such a shame as my lovely tenants cannot afford to buy my properties and this will result in 6 families been made homeless. Ending Section 21 without the necessary measures being put in place, will be the final nail in my tenants coffin. Lets hope the Government and Shelter, wake up soon before it gets far worse for our good tenants. I won’t hold my breath.

    Shelter have issued a survey asking for landlord views: https://www.property118.com/shelter-ask-for-landlords-views/

  • I as a landlord of over 20 properties in the North West will never ever rent to people either unemployed or on DSS due to increase risk of rent default, in the past i jave had to spend thousands of pounds evicting tenants for rent default. Its cheaper to keep a property empt for several month until a good tenant comes along.

    As for the recent changes in fees i now insist that all tenants must have purchased a tenant reference report from a good agency other wise they not allowed to inspect or rent from me. Also increase the monthly rent for landlord tenant insurance. One way or another temant still has to pay all fees

  • We do take tenants on benefits BUT as mentioned previously the payments of rent direct to tenant even when both tenant and landlord want it paid direct to landlord has to be addressed. On 2 occasions I have contacted the council only for them to decline sticking rigidly to the 2 month rule despite the risk of homelessness. In one case I was correct that the money would not be passed over so she lost her home. In the second case as we had not requested it when there was 2 months arrears because it eventually cleared it was declined despite it being clear the tenant was struggling to pay over on time and a S21 in place! The government need to work with landlords, pay the correct rent and respect what we do. The S21 change needs to be addressed and a much swifter system for repossession when there are rent arrears – the time it takes can easily add £3000 to £4000 on top of any arrears that were there when the process started. We also find DSS tenants not all but those that are the cause of landlords reluctance to accept them – leave a property full of furniture and black bin liners, filthy and needing a lot of work to relet! So the removal of the free period of council tax again makes a landlord reluctant to accept DSS as that is a further burden for long voids and the reduction in deposit to 5 weeks in these cases does not even cover rubbish removal! Sorry this goes on but all relevant to a landlord’s decision as who to offer a property to. We all want long term tenants that pay their rent and look after the property as their home – be that DSS or working

  • Yet again interference of MY property choices. Will all these campaigners pay me the £4000 I lost with a inherited tenant. Of course not its not their business or money at risk. I am very disappointed n RLA for interfering in MY affairs in such a couldn’t care less about you as long as unscrupulous tenant get a fair shot at screwing you over. I know they are not all the same and quite honestly I will remove the DSS from my wording. It will be stipulated that all references MUST be passed and rent guard insurance approved. If anyone campaigns against that then its a case of sell up and let the government and campaigners get on with housing housing issues alone.

    • The RLA’s position has always been that landlords should assess all potential tenancies individually, and that decisions must be made fairly on a case by case basis, considering all the risks.
      The legal position is unclear, but a blanket ban is potentially unlawful.

  • As a landlord or agent, of course we discriminate.
    We ‘discriminate’ against people who cannot afford the rent + bills each month. This isn’t just for our own good; putting people into legal agreements which require them to pay monthly amounts which they can’t afford is not just bad business practice, but also completely immoral.
    I feel sick inside when I have to gently explain to someone that they cannot afford a particular property given their financial situation, but it’s better than putting them into said property, knowing that it will likely end in an eviction, court fees, unpaid rent, possible homelessness etc.
    We ‘discriminate’ against people with bad credit ratings, requiring them to provide guarantors or refusing to rent to them. We ‘discriminate’ against people who put down the holding deposit and then disappear off the radar despite all our efforts to contact them.
    Certain attributes indicate that a person is poor at controlling their personal finances, or likely to be made redundant (zero-hours contracts), or otherwise less suitable as a potential tenant.
    Employers are allowed to ‘discriminate’ on the grounds of competence.
    Insurers offer different premiums to different customers based on a whole range of personal information.
    Suppose two clients approach me about a property, and one is a well-presented working parent, and the other is unemployed and smelling of cannabis – am I not to discriminate between the two?
    We have taken on DSS cliens in the past – they are far more likely to require a Section 8 notice, especially due to unpaid rent. We have a couple of good tenants receiving beneifts, but they are a small minority.
    If clients on benefits presented no greater risk than clients who earn the money to pay their rent, no one would ‘discriminate’ against them.

  • I think the fundamental issue for me here is about choice. It’s my home and therefore I believe I should be able to select whomever I want to live there because it will be me that has to pick up the pieces if it all goes wrong. The facts are:-

    1. Housing benefit tenants represent an increased risk of both non-payment and in general terms reliability over working equivalent tenants.
    2. I won’t be paid for at least 2 months from a HB tenant when my contract states the rent is due in advance.
    3. My mortgage and home insurance stipulate that I will/can only rent to working individuals.

    I have been a landlord for 15 years and have never not returned a deposit n full to a tenant and the reason for this is because I have been very careful about who should rent my house.

    Until such a time that this becomes law I will therefore continue to exclude HB tenants.

  • Phil is spot on. Let govt put their money where their mouth is.

    But I have to laugh at the Housing Ministers comment that everyone should have the opportunity when it comes to finding a home. By that token, when are the government going to legislate to force banks to give mortgages to people who cannot afford them… ? Ah yes, the bankers are their friends but landlord bashing is an easy sport that picks up votes amongst the lower paid.

  • so the Govt want everyone to be equal REGARDLESS of finacial ability ? – Really ?
    Sounds a bit like Labour’s land for the many, not the few. ‘ Doesn’t matter what you can afford, – the labour ( Robin Hood ) party will distribute wealth to the poor. ‘
    A Landlord I spoke with put it well, she said If I work 10 x harder than someone else, why should we be equally rewarded.
    Again, a bit like Labour stiffling enterprise and progress.

  • Hi Sally,

    Peter makes some very valid points about discrimination & thanks to all for supporting my wish to at least recognise the elephant in the room is actually there. However, it’s important that we realise some basic issues that don’t need politically correcting. It’s clear that, not just because of stigmatisation, some of us won’t rent to a benefits tenant for the reasons I’ve previously laid out. Peter makes very good comparisons to finance lenders, are we not lending people something too? Our property that we’ve sunk time, effort, money & often risk into.

    If we as an industry sector are forced into appearing not to discriminate, even though financial lenders do so, aren’t we just giving false hope to those this exercise is trying to help? If a landlords credit qualification process isn’t going to accept a benefits tenant, why not just make it known? Isn’t it better to save the blushes of all involved before any enquiry is made? In my view that’s just common sense. Let’s add to this the time taken for both landlord & potential tenant in viewing a property that they have no hope of renting. I know I don’t have time to throw away, I’m sure most prospective tenants don’t either.

    So taking this alongside my original point of having the DWP as legal guarantor, aren’t we just making the renting exercise potentially more embarrassing, time consuming & complex by passing the ban on no DSS style ads?

    It’s time someone got a grip of that uncommon commodity, common sense. If the DWP wants to stand up to the challenge, I’m in, but not until common sense prevails.

    I hope you see the view from our side of the fence & can communicate this to those that make policy a reality.

    Thanks again to all for your support on this emotive but very important issue. Maybe by making our views & very valid points known someone will take that elephant out of the room & let us get on with what we do best, providing decent housing for decent people in a market that’s far from easy.

  • I built up a sizeable portfolio from 1991 by specialising in catering for DSS tenants in a town where there was a demand for this.

    Does Heather Wheeler have the slightest understanding of the kicking that Section 24 of the finance Act as delivered by Mr George Osborne had on landlords such as myself?

    I diversified into student letting in a University city around 15 years ago – that is the only market where I am accepting new tenants, the figures don’t add up on single household DSS lets at the margin of Section 24 tax rates far in excess of 40% headline rate. As a result that part of my portfolio is being sold off

    The problem is not all about landlords Heather, and it is your government’s intervention that has made me a student only landlord not taking any DSS or employed tenants.

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