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Time to end banks’ discrimination against tenants on benefits

Sally Walmsley
Written by Sally Walmsley

Urgent action is needed to tackle discrimination against benefit claimants by buy-to-let mortgage providers.

The call is being made by the RLA, following news that a landlord has had her mortgage revoked because she is renting to a benefit claimant.

Helena McAleer, a landlord from Northern Ireland, contacted her bank, NatWest, after she discovered that the value of her property had increased and that there was a potential that she could release equity from the house.

Following discussions with the bank, she was told that she would no longer be able to receive her buy-to-let mortgage from Natwest as it was the bank’s policy not to allow rentals to benefit claimants.

The bank’s own buy-to-let eligibility criteria notes: “We will not consider multiple tenancies, Homes of Multiple Occupancy, bedsits, DSS tenants or ‘Related Person’ tenancies.”

Helena McAleer has since established a campaign page on Facebook in which she writes: “I was beyond disgusted by the statement.

“Actually more than that I cried my eyes out for hours, how could a bank, a person at a bank make the decision that I had to kick someone out of their home simply because of their circumstances, because fundamentally that’s what they are asking me to do.”

Ms McAleer has also started a petition calling for measures to tackle such practices which clearly discriminate against benefit and Universal Credit claimants.

Research carried out by the Residential Landlords Association’s (RLA) mortgage consultants, 3mc, last year found that 66 per cent of lenders representing approximately 90 per cent of the buy-to-let market do not allow properties to be rented out to those in receipt of housing benefit. This includes TSB, Virgin and the Natwest.

In a letter being sent to the Treasury Minister responsible for banking, John Glen MP, the RLA is calling for:

  • The Government to use the influence it has in those banks in which it currently has shares to end such discriminatory practices.
  • The Financial Conduct Authority (FCA), working with the Bank of England, to undertake a full investigation into the extent of this problem and prepare plans to end it. The RLA believes such practices breach a number of principles within the FCA’s ‘Treating Customers Fairly’ agenda.
  • The Equalities and Human Rights Commission to undertake a review of whether such practices breach equalities law.

David Smith, Policy Director for the RLA said: “With growing numbers of benefit claimants now relying on the private rented sector, it is shameful that many lenders are preventing landlords renting property to some of the most vulnerable in society with little or no justification.

“The banks have had long enough to get their house in order. It is now time to take firm action to stop such unjust practices.”

About the author

Sally Walmsley

Sally Walmsley

Sally Walmsley is the Magazine and Digital Editor for the NRLA. With 20 years’ experience writing for regional and national newspapers and magazines she is responsible for editing our members' magazine 'Property', producing our articles for our news site, the weekly and monthly bulletins and editorial content for our media partners.


  • We also need the insurance industry to stop descriminating against benefit claiming tenants as most of them refuse to insure.

  • How is this bank behaving any worse than the large numbers of RLA member landlords who are increasingly moving away from lettting to people on benefits? There are a whole raft of extra risks that come with letting to people whose main income is benefits. Rather than bash the bank why not poll your members?

  • Question is assuming that provision was in her mortgage offer from the beginning why on earth did she lend to someone on benefits in the first place,. Possibly because she never read the provisions in the first place ??? Further in some residential leases it also has restriction on who the property can be underlet to. So moral is as always READ you mortgage offer READ your lease

    • Choose the right target: banks and many agents and landlords know that the risk of default is very high with benefit claimants, so on non-viability grounds it makes no financial sense to let to them. The target for change should be the Government’s benefit system which has both overlooked abuse by some claimants in the past and even now ACTIVELY DISCOURAGES genuine Claimants who wish to work more by IMMEDIATELY cutting benefits when they increase their hours/earnings, without allowing any period of grace to enable them to pay off debts (including rent arrears).
      Target the DYSFUNCTIONAL BENEFIT SYSTEM, not the banks who need their loans repaid, or landlords who have mortgage interest and repayments and many other expenses. Delay the further introduction of Universal Credit until it can be modified to GENUINELY SUPPORT Claimants who want to work and pay their bills.

  • Not just banks and insurance companies but developers/house builders too. St George/Berkeley Group’s development, Imperial Wharf, SW6, has a Lease which specifically prohibits underletting “the Demised Premises to any family individuals or group of people all or some of whom are on housing benefit or any similar financial support from the Government or any other body”.

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