End discrimination against tenants who receive housing benefit

Read and share our guide for the lettings industry

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 unlawful and leave you at risk of being sued.

So, we’ve made this guide to help you comply with equality law. It sets out what you need to do to make sure your business does not discriminate against people who receive housing benefit or Universal Credit.

Picture of ads in letting agent window

Section 01:

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.

A higher proportion of 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.

Did you know?

  • 60% of adults on housing benefit are women (1)

  • people receiving disability benefits are three times more likely to also receive housing benefit (2)

Woman looking at property ads

Section 02:

OpenRent discrimination - man in wheelchair

Did you know?

Official guidance confirms ‘you must not accept an instruction to discriminate from a property seller or landlord’.

The Equalities and Human Rights Commission (4)

Ending ‘No DSS’ policies

As the court has ruled (3), it is against the law for letting agents and landlords to have blanket bans on letting to tenants who receive benefits. This is because these bans lead to indirect discrimination.

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 who receive 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.

Section 03:

'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 that they should not use discriminatory language in adverts, and you should also be monitoring for unlawful discrimination.

Advert containing 'No DSS' statement.

Photo credit: Francis Tyers

Section 04:

Woman using her computer, on the telephone

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.

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.

References

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 acts as a guarantor.

Section 05:

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, it has been found to be the case by the court 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 the 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. (5) And most insurance brokers can find suitable and affordable rent guarantee products to cover letting to tenants receiving benefits. (6)

Even where the 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.

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.

Image of adverts displayed in a letting agents' window.

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 (7)

  • if rent deposit bonds and guarantee schemes can help with the upfront costs of renting

Official guidance confirms ‘you must not accept an instruction to discriminate from a property seller or landlord’.

Find out more

Section 06: Implementing change

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 (8)

     



Picture of two people having an animated conversation.

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

Read our live blog to keep up with our fight against DSS discrimination

Footnotes

1. This statistic was calculated using 2016 data from the Department for Work and Pensions (DWP). The 60% of adults on housing benefit who are women is the number of adult women in a household with a housing benefit claim.

2. Due to the inability to cross-refer disability and housing benefits on the DWP stats tool, this data is taken from wave 7 of ‘Understanding Society’. Tenure data was matched to the household identifiers for the individual respondents; filtered by those within the private rental sector and claiming Disability Living Allowance. Total unweighted base is c.4,000 within this group. Data was collected January 2015 – January 2017.

3. 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.

4. Equality and Human Rights Commission, Equality law – estate agents, letting agents and property management companies: https://www.equalityhumanrights.com/en/advice-and-guidance/equality-law-estate-agents-letting-agents-and-property-management-companies. Accessed on 8 March 2019.

5. According to research for Shelter by Mortgages for Business, only The State Bank of India and The Family Building Society still had restrictive terms.

6. The British Insurance Brokers Association confirmed in a recent survey of their members, 58% confirmed they would be able to arrange rent guarantee insurance for a landlord wanting to let to a tenant in receipt of benefits.

7. See government guidance for managed payments for more information.

8. English Housing Survey: Private rented sector, 2016-17. Ministry of Housing, Communities and Local Government.