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PRS landlords criticise banks over discrimination against tenants on benefits
The Residential Landlords Association (RLA) has written to the government calling for action to prevent banks discriminating against tenants on housing benefit.
In a letter to John Glen, treasury minister responsible for banking, the group which represents private landlords in England has called for change, after research revealed 90% of lenders do not permit properties to be let to tenants on housing benefit.
The controversy follows a story about Natwest refusing to continue to provide a mortgage for a home in Belfast because the tenant is in receipt of benefits.
The bank’s own buy-to-let eligibility criteria read: “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.
Research carried out by the RLA’s mortgage consultant 3MC last year found that 66% of lenders representing approximately 90% of the buy-to-let market do not allow properties to be rented out to those in receipt of housing benefit. This includes TSB, Virgin and Natwest.
In a letter sent to Mr Glen, the RLA is calling for:
- The government to use the influence it has in those banks in which it currently has shares to end such discriminatory practices.
- The Financial Conduct Authority (FCA), working with the Bank of England, to undertake a full investigation into the extent of this problem and prepare plans to end it. The RLA believes such practices breach a number of principles within the FCA’s ‘Treating Customers Fairly’ agenda.
- The Equality and Human Rights Commission to undertake a review of whether such practices breach equalities law.
David Smith, policy director for the RLA said: “With growing numbers of benefit claimants now relying on the private rented sector, it is shameful that many lenders are preventing landlords renting property to some of the most vulnerable in society with little or no justification.
“The banks have had long enough to get their house in order. It is now time to take firm action to stop such unjust practices.”
A Natwest spokesperson said: “The bank has specific lending criteria and is not able to offer mortgages in certain circumstances, which are made clear on a customer’s terms and conditions.
“There are alternative providers who may be better suited for customers in these circumstances.”
