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Natwest apologises and launches review after ‘No DSS’ controversy
A major UK bank has said it will conduct a review after admitting it "regrets" its handling of a case where it declined a mortgage to the landlord of a tenant on housing benefit.
Earlier this month, landlord Helena McAleer was refused a mortgage for a buy-to-let home in Belfast by Natwest because her tenant was in receipt of housing benefit.
This sparked a furious backlash with the Residential Landlord’s Association writing to the government to demand changes to prevent this practice.
Today, a Natwest spokesperson told Inside Housing: “While we regret the way in which we handled this particular case, we are grateful it has brought these issues to our attention and has given us a welcome opportunity to examine our policies in this area and we are now in the process of conducting a widespread review of them."
It is understood the bank has conducted a review of the customer’s case and concluded “it did not meet the level of service” it would expect to provide.
The bank has said it has identified a number of areas for improvement and apologised to Ms McAleer.
The bank said Natwest does not prevent all customers with a commercial buy-to-let mortgage from letting to tenants receiving benefits, and its current restrictions on this apply for landlords with fewer than 10 properties.
Its buy-to-let eligibility criteria reads: “We will not consider multiple tenancies, Homes of Multiple Occupancy, bedsits, DSS tenants or ‘Related Person’ tenancies.”
‘DSS tenants’ is a reference to tenants receiving housing benefit, based on the previous acronym for the Department of Social Security – a former name for the department now known as the Department for Work and Pensions which was dropped in 2001.
David Smith, policy advisor at the RLA, said: “With increasing numbers of benefit claimants now reliant on the private rented sector for a home we welcome NatWest’s decision to review its lending practices.
“The RLA continues to urge the rest of the industry to do likewise so that private landlords are better supported to house vulnerable tenants.”
Charities have campaigned over the exclusion of benefit claimants from private rented sector housing, with Shelter claiming the practice could amount to a breach of the Equality Act.
