End income and family discrimination against tenants
Read and share our guide for letting agents on how to avoid discriminating against people who receive benefits or have children.
This information is for letting agents and people who advertise or let properties to tenants
This guide is designed to help you comply with equality law. It sets out what you need to do to make sure your business doesn’t discriminate against people because of their income or children.
'No DSS', 'Professionals only' and 'No kids' policies make it difficult for tenants to find a home – even if they can afford the rent and the property is a suitable size for them. Tenants say these policies make them feel like second-class citizens, and some people even become homeless as a result of them.
These policies and bans are unlawful and leave you at risk of legal action.
Income discrimination
Why is it unlawful to discriminate against people who receive benefits?
The Equality Act 2010 made it unlawful to either directly or indirectly discriminate against anyone because of their ‘protected characteristic’. For example, their disability, race, religion, sex, or sexual orientation.
Indirect discrimination is when a practice or rule is applied to everyone in the same way, but has a worse effect on people with certain protected characteristics.
A higher proportion of women, people with disabilities, and Black and Bangladeshi households receive benefits than the general population. And this means that these groups are more likely than most to lose out from a refusal to rent properties to people who claim benefits. This is indirect discrimination.
Did you know?
55% of adults who receive Universal Credit are women, despite accounting for just 49% of private renters and only 51% of the population (1)
people who receive disability benefits are four times more likely to also receive housing benefit (2)
Black households are almost three times more likely than White households to receive Universal Credit (3)
If tenants can't pay
Why wouldn't benefits cover the rent?
The range of properties that many tenants who receive benefits can afford is limited. This is because of cuts to benefits and problems with how the system works.
That’s why we, along with private landlords, are calling on the government to make housing benefit fit for purpose.
Can you refuse to rent to people who can't afford to pay?
By law, you can refuse an application from a tenant if it is clear that they can’t afford the rent. But, to make sure you don’t unlawfully and indirectly discriminate, you must consider each applicant’s full circumstances first.
Don’t make assumptions about what people can afford.
If benefit levels don’t cover the whole rent, a tenant may still be able to pay the full rent or rent in advance with other income, savings, or with help from family. They may also have other ways of showing that they’re able to afford the rent.
Family discrimination
Why is it unlawful to discriminate against people who have children?
Blanket bans against renting properties to people with children is also indirect discrimination under the Equality Act 2010.
This is because women are more likely to have dependant resident children than men. And this means that refusing applications for suitably sized homes from those with children will disproportionately affect women - who have the protected characteristic of sex.
Did you know?
89% of lone parents with dependant children are mothers (4)
85% of privately renting adults who live in lone parent households with children are female (5)
Can you refuse to rent to families if the property isn’t big enough for them?
By law, you can refuse an application from a family if the property isn’t a suitable size for them. But, to make sure you don’t unlawfully and indirectly discriminate, you must first consider each applicant’s full circumstances. It is also good practice to provide renters with a clear explanation for why their application was declined, preferably in writing.
If agents choose to allow adverts stating a maximum acceptable number of tenants/children, then this must be in line with the actual size of the property itself. It should not be used simply to put off larger families or people with children from applying.
Advertise lawfully
'No DSS’, ‘Professionals only’ and ‘No kids’ are common phrases in property adverts. These blanket bans are the most obvious discriminatory practices in the lettings market.
They can discourage people who receive benefits or have children from even registering an interest in properties. And this means that you can’t consider their individual circumstances first.
Using this kind of discriminatory language puts both agents and landlords at risk of legal action.
You should avoid using it on your website, property portals, in branch windows, local newspapers, or anywhere else.
Protect your business by making sure your staff understand that they shouldn’t use discriminatory language in adverts - both explicitly and in less obvious ways.
It is also good practice to be actively monitoring for any unlawful discrimination across your business as a whole.
End internal policies like 'No DSS' and 'No kids'
Did you know?
The Equalities and Human Rights Commission states ‘you must not accept an instruction to discriminate from a property seller or landlord’ (6).
As the courts have ruled (7), it is against the law for letting agents and landlords to have blanket bans on letting to tenants who claim benefits. This is because these bans lead to indirect discrimination.
The Property Ombudsman also states that ‘to be excluded from a significant portion of the homes available simply because you have children cannot be considered as treating consumers equally’ (8).
Written policies refusing all applications from tenants receiving benefits or with children are the most obvious types of bans. But it still counts as a ban if you refuse to rent certain properties to all people in receipt of benefits or with children. For example, those properties where the rent is above the relevant Local Housing Allowance (LHA) rate or properties with just two bedrooms.
What if the landlord doesn't want tenants who receive benefits or have children?
This is still unlawful discrimination. And if your agency has a culture of not renting homes to people who receive benefits or have children, 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. It is your responsibility to always give landlords the right advice and make them aware of the law.
Get all the facts
Character reference requests that always ask for an employer reference may discriminate against tenants who receive benefits. They may also negatively affect those with dependant children who are unable to work due to childcare responsibilities.
You may find that the tenant can provide a reference from someone else, such as a previous landlord. Or they may have someone who can act as a guarantor.
Consider individual circumstances
Don’t reject an application, or advise a landlord not to accept a tenant, simply because they receive benefits or have children. You must first consider the tenant’s full circumstances to understand the merits of their application.
Some landlords may feel concerned about benefits being paid in arrears. But, by looking at a tenant’s individual situation, you may find that they can pay the rent in advance with savings (or other means) until their benefit payments start.
Other landlords may be worried about how suitable the size of the property is for the family applying. But you can easily check legal overcrowding guidelines to see if the property is the right size.
References
Most agents have processes in place to establish how suitable prospective tenants are, including affordability checks and character references. You must make sure that your processes don’t discriminate against tenants receiving benefits or with children.
Advocate for best practice
Giving landlords the right advice
The value of a good letting agent is the advice that they can give to their clients. Many 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 or have children from their properties, this counts as unlawful discrimination. The law applies to them in the same way as it does to you, and we have advice above about how to handle this situation.
You must make sure that you and your client act lawfully. Some landlords may be concerned that the terms of their mortgage or insurance policy don’t allow them to rent to people who claim benefits.
Industry leader Mortgages for Business thinks that over 99% of the buy-to-let mortgage market is now ‘No DSS’ free, so this fear is outdated (9). And most insurance brokers can find suitable and affordable rent guarantee products to cover letting to tenants receiving benefits (10).
Even when the terms of your client’s financial products do include restrictions on tenants claiming 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.
Landlords will want to know if people who receive benefits will be able to afford the rent for their property. In order to give your clients the correct advice, your business must have at least a basic understanding of the benefits system and what tenants are likely to be entitled to.
Landlords will also want to make sure that their property is the right size for any family applying. This means that you should be able to provide correct advice about the law and guidance on overcrowding and which size home will be suitable for which size family.
Advice about benefits and home sizes
Many landlords may not know exactly how the benefits system works or what the law is in relation to suitably sized family homes. They may have questions about:
how housing benefit and Universal Credit are paid
what Local Housing Allowance (LHA) rates are
when and how 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 (11)
how rent deposit bonds and guarantee schemes can help with the upfront costs of renting
how the law on overcrowding works and which size home is suitable for which size of family
Equality law states that ‘you must not accept an instruction to discriminate from a property seller or landlord’.
Find out moreImplementing change
Training your staff
To use this guide effectively, you may need to train your staff. We recommend aiming for these goals. All staff should:
recognise that it is their personal responsibility to avoid unlawful discrimination
know what direct and indirect discrimination look like, and how to avoid them
be able to give a minimum level of accurate advice about benefits and suitability of home sizes. Not every staff member must be an expert, so we recommend having one person with in-depth knowledge in each branch
know the value of benefits and families to your business
avoid making assumptions about the suitability of people who receive benefits or have children – 21% of all private tenants claim benefits and two thirds (68%) of them are in work (12); and 59% of private renting families have been living in their current accommodation for more than three years, compared to 47% of those without children (13)
It’s simple: to stop discriminating against people who receive benefits or have children, you just need to treat them fairly and consider their individual circumstances first.
Using our guide should help you to work confidently with the millions of tenants who receive benefits or have children and avoid committing acts of unlawful discrimination.
Read our live blog to keep up with our fight against income discriminationFootnotes
1. Taken from the Department for Work and Pensions (DWP) statistics on people claiming Universal Credit in April 2022 compared with Census 2011 data on housing tenure by sex.
2. Thirty-five percent of people in receipt of Disability Living Allowance in 2017-20 also received housing benefit compared with 9% of those not in receipt of Disability Living Allowance. Calculated from DWP households below average income figures derived from the Family Resources Survey with data combined for 2017-18, 2019-20, and 2020-21.
3. In 2020-21, 11% of households where the head identified as Black African, Caribbean, or Black British claimed Universal Credit compared to 4% of White households. Taken from the DWP Family Resources Survey 2020-21.
4. Taken from the Office for National Statistics (ONS) - Families and households in the UK: 2021
5. Shelter analysis of ONS data on families and households and DWP data on housing benefit claimants.
6. See the Equality and Human Rights Commission’s guidance on equality law for estate agents, letting agents, and property management companies. Accessed on 23 May 2022.
7. In a hearing on Wednesday 1 July 2020 at York County Court, District Judge Victoria Elizabeth Mark confirmed that rejecting tenancy applications because the applicant is in receipt of housing benefit is unlawfully indirectly discriminatory on the grounds of sex and disability, and is contrary to sections 19 and 29 of the Equality Act 2010. In a hearing on Tuesday 8 September 2020 at Birmingham County Court, her Honour Judge Mary Stacey also confirmed that rejecting tenancy applications because the applicant is in receipt of housing benefit is unlawfully indirectly discriminatory on the grounds of sex and disability, and is contrary to sections 19 and 29 of the Equality Act 2010.
8. See Guardian article on the Property Ombudsman’s ruling.
9. Industry leader Mortgages for Business carried out research for Shelter in November 2020 and told us that over 99% of the buy-to-let mortgage market is now ‘No DSS’ free. All the major players have removed their ‘No DSS’ clauses, including in historic contracts, and have confirmed that they would never enforce them in any case.
10. The British Insurance Brokers Association confirmed in a survey of their members that 58% would be able to arrange rent guarantee insurance for a landlord wanting to let to a tenant in receipt of benefits.
11. See the government’s guidance for more information about managed payments.
12. See households below average income data in Stat-Xplore..
13. Shelter/YouGov Private Tenants Survey, 2021.