Refusing Benefit Tenants not Unlawful

Evict a tenant helping remove bad tenants
Jun 07 2016

Refusing Benefit Tenants not Unlawful

It seems that it is not unlawful to refuse tenants that are claiming housing benefit. A recent House of Commons briefing report: “Can private landlords refuse To Let to Housing Benefit Claimants?”  found that it is not unlawful discrimination for a landlord or letting agent to refuse To Let to a prospective tenant who is on benefit.

Will these changes effect who landlords and letting agents now provide homes to?

Will it increase the burden of social housing providers to house these tenants?

Could we now see a rise in tenant evictions in areas such as London, Birmingham and Manchester where landlords currently renting to tenants on benefit and wish to replace them with employed tenants, possibly on higher rents?

It was found from the report that receipt of benefits is not one of the protected characteristics as set out in the Equality Act 2010.

How long before the government tries to pass an amendment to this act to ensure it covers those receiving benefits?

The current social housing providers cannot cope with current demands never mind if the market is then flooded with private landlords evicting tenants to make way for employed tenants.

The new paper placed in the House of Commons library is specifically aimed at the issue of letting to benefit claimants, something that has produced some controversy in recent years between landlords at the homelessness charities such as Shelter.

The report lists a number of reasons why landlords do not let to claimants and claims they associate housing benefit tenants with rent arrears, anti-social behaviour and damage to property.

Something that we hear from our landlords is the concern that Housing Benefit, also known as Local Housing Allowance, is paid to claimants, not landlords.

When the local authority makes the payments to tenant claimants, the tenant is then trusted to pass the money to their landlords, rather than spend it on other things. However, that trust is not always born out in practice and now with this paper clarifying the legal position we could see a huge rise in tenant removal.

Add to the mix that often the rents set by the Local Housing Allowance, which are often not sufficient to meet market rents for that locality. Therefore the tenant has to top-up the rent from their own pocket, again something some landlords are not prepared to accept or trust the tenant.

Another pressure point for both tenants and landlords is the recent roll-out of Universal Credit (UC), where six separated benefits are rolled into one and paid as one, again directly to the tenant, this again leads to anxiety on the part of many landlords over regular payments. Please feel free to read the commons paper.

Will these ruling really have a huge impact on the rental market and change the demographics of private tenants?

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  • Geoff Willing

    None of this mentions Insurance restriction on landlords or the need to pay higher insurance rates for tenants that are not working or in receipt of benefits. Couple this with the aggressive and officious nature of councils why get involved? It makes no business sense unless you charge well over market rates to cover the risk and increased costs.

    12th June 2016 at 10:38 pm
  • Roger Lancaster

    We always specify a home owning guarantor with equity and in employment. If they cannot find some one they know who trusts them to pay the rent why should we who do not know them from Adam and only have references to judge them on. Housing Associations and Councils receive huge benefits in their operation compared to the PRS landlords so they should take the riskier tenants and have to deal with the problem tenants.

    14th June 2016 at 10:18 am

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