End discrimination against tenants who receive housing benefit
Read and share our guide for the lettings industry
This guide is for letting agents and people who advertise or let properties to tenants.
We'll show you what to do to make sure your business does not discriminate against people who receive benefits.
‘No DSS’ bans make it difficult for tenants receiving benefits to find a home – even if they can afford the rent. Tenants say bans make them feel like second-class citizens, and some people even become homeless as a result.
These bans are often unlawful and leave you at risk of being sued.
But we’ve made this guide to help you comply with equality law, by setting out what you need to do to make sure your business does not discriminate against people who receive housing benefit or Universal Credit.
Why is it unlawful to discriminate against people receiving benefits?
The Equality Act 2010 made it unlawful to directly or indirectly discriminate against anyone because of a ‘protected characteristic’ when renting out a home. You cannot refuse to rent a property to someone who receives benefits without considering their circumstances.
More people with protected characteristics receive benefits than the general population. For example, more women and people who are disabled claim housing benefit (both protected characteristics), so they are more likely to lose out from a refusal to rent properties to people who receive benefits. This counts as indirect discrimination.
Can you refuse to rent to people who cannot afford to pay?
By law, you can refuse an application from a tenant if it is clear they cannot afford the rent. But to make sure you do not unlawfully discriminate, you must consider each applicant’s full circumstances. Don’t make assumptions about what they can afford.
Where housing benefit levels do not cover the whole rent, a tenant may be able to pay the full rent or rent in advance with other income, savings or help from family. They may have a guarantor.
Why would benefits not cover the rent?
The range of properties that many tenants who receive benefits can afford is limited because of cuts to benefits, and problems with how the benefits system works.
We are campaigning with the lettings industry for these cuts to be reversed.
Ending ‘No DSS’ policies
Our legal view, backed by an independent law firm, is that it is against the law for letting agents and landlords to have blanket bans on letting to tenants who receive benefits.
A written policy banning all applications from tenants receiving benefits is the most obvious type of ban. But it still counts as a ban if you refuse all tenants in receipt of benefits for some properties and not others. For example, those where the rent is above the relevant Local Housing Allowance Rate.
What if the landlord doesn't want tenants receiving benefits?
This is still unlawful discrimination. And if your agency has a culture of not renting homes to people who receive benefits, this amounts to an unwritten ban.
Your staff will be barring tenants through their actions, even if it isn’t official.
You should take steps to change the culture across your whole business, or in individual branches and teams, as needed.
Did you know?
Official guidance confirms ‘you must not accept an instruction to discriminate from a property seller or landlord’.
‘No DSS’ and ‘Professionals only’ are common phrases in property adverts. This is the most obvious discriminatory practice in the lettings market against people receiving benefits.
It can discourage people who receive benefits from even registering an interest in properties, which means you cannot consider their individual circumstances.
Using this kind of discriminatory language puts both agents and landlords at risk of legal action. You should avoid it on your website and property portals, in branch windows, local newspapers, or anywhere else.
Protect your business by ensuring your staff understand they should not use discriminatory language in adverts, and monitoring for unlawful discrimination.
Consider individual circumstances
Do not reject an application or advise a landlord not to accept a tenant simply because they receive benefits. You must consider the tenant’s full circumstances to understand the merits of their application.
For example, landlords may feel concerned if benefits are paid in arrears. But by looking at a tenant’s circumstances, you may find they can pay the rent in advance with savings (or other means) until their benefit payments start.
Most agents have processes in place to establish how suitable prospective tenants will be, including affordability checks and character references. You must ensure that your processes do not discriminate against tenants receiving benefits.
For example, character reference requests will discriminate against tenants who receive benefits if they always require an employer reference.
You may find that the tenant can provide a reference from someone else, such as a previous landlord. Or they may have someone who a guarantor.
Giving landlords the right advice
The value of good letting agents is the advice that they can give their clients. Many small and accidental landlords rely on their agents to tell them how to meet their legal duties.
Giving landlords bad or incorrect advice puts you in legal jeopardy – and fails your client.
Advice about unlawful discrimination
If a landlord wants to ban all tenants who receive benefits from their properties, our legal advice is that this is unlawful discrimination. The law applies to them in the same way as it does to you, and we have advice above on how to handle this situation.
You must make sure your client acts lawfully. Some landlords may be concerned that the terms of their mortgage or insurance do not allow them to rent to people in receipt of benefits.
At time of publishing this guide, over 95% of mortgage lenders do not restrict tenants on housing benefit in their terms, so this fear is outdated. (4) And most insurance brokers can find suitable, affordable, rent guarantee products to cover letting to tenants receiving benefits. (5)
Even where terms of your client’s financial products do include restrictions on tenants on housing benefit, this doesn’t allow them to act in an unlawfully discriminatory way. If they do, tenants could claim against them and their mortgage lender.
Advice about benefits
Many landlords may not know exactly how the benefits system works. They may have questions around:
- how housing benefit and Universal Credit are paid
- what LHA rates are
- when tenants can expect benefit payments to be made
- when benefits can be paid directly to the landlord, and how to apply for Alternative Payment Arrangements (6)
- if rent deposit bonds and guarantee schemes can help with the upfront costs of renting
Landlords will want to know if the rent for their property is affordable for people who receive benefits. Your business must have at least a basic understanding of the benefits system and what tenants are likely to be entitled to.
Training your staff
You may need to train your staff in order to use this guide effectively. We recommend aiming for these goals:
- Staff recognise their personal responsibility to avoid unlawful discrimination
- They know what benefits discrimination looks like, and how to avoid it
- Your business can give a minimum level of accurate advice on benefits. Not every staff member must be an expert, but we recommend having a person with in-depth knowledge in each branch
- Employees know the value of benefits to your business
- Staff should not make assumptions about people who receive benefits – 22% of all private tenants receive housing benefit, and almost half are in work (7)
It’s simple. To stop discriminating against people receiving benefits, you just need to treat them the same as any other tenant.
Using our guide should help you avoid unlawful discrimination and work confidently with the millions of tenants who receive benefits.