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Over the years, it’s been fairly common practice for private landlords and letting agents to advertise properties saying they won’t accept applications from people reliant on Housing Benefit (HB) or the housing element of Universal Credit to pay their rent.

The Department of Social Security (DSS) hasn’t existed since 2001, but the phrase generally used in adverts is “No DSS”. This raises the question of whether such restrictions amount to unlawful discrimination. Although unlikely to amount to direct discrimination, as income and employment status are not protected characteristics under the Equality Act 2010, it has long been argued that it could amount to indirect discrimination in some cases.

Findings of unlawful discrimination 2020

In what was described as a ‘landmark’ case, District Judge Victoria Elizabeth Mark sitting in York County Court, considered the case of a disabled single parent whose application for private rented housing was refused by a letting agent because she received Housing Benefit. In a judgment dated 2 July 2020 (PDF), which was widely reported in the media on 14 July 2020, the agent was held to be in breach of the Equality Act 2010. The judgment declared:

The Defendant’s former policy of rejecting tenancy applications because the applicant is in receipt of Housing Benefit was unlawfully indirectly discriminatory on the grounds of sex and disability contrary to sections 19 and 29 of the Equality Act 2010.

This was followed by a case in Birmingham County Court in which judgment was handed down on 8 September 2020. Circuit Judge and Acting Designated Civil Judge for Birmingham (now High Court Judge), Mary Stacey, held the letting agency, Paul Carr, had operated a blanket ‘No DSS’ policy which amounted to unlawful indirect discrimination against disabled people.

Why are landlords reluctant to let to benefit claimants?

Historically, landlords were reluctant to let to benefit claimants because of delays in processing applications. Since April 2008, a key factor influencing landlords has been the introduction of the Local Housing Allowance (LHA) and the requirement that this, except in certain specified circumstances, is paid to claimants rather than landlords. Restrictions on levels of LHA payable were introduced by the Coalition Government in April 2011.These changes led various housing bodies, including representative bodies of private landlords, to argue that HB claimants were being priced out of the market. 

Further restrictions were introduced; for example, LHA rates were frozen with effect from April 2016 for four years. This added to landlords’ concerns about the gap between LHA and market rent levels. Evidence submitted to the Communities and Local Government Select Committee’s inquiry into homelessness over 2016-17 led them to recommend: “Local Housing Allowances levels should also be reviewed so that they more closely reflect market rents.”

Although LHA rates were increased in 2020/21, they were frozen again in cash terms from 2021-22. A coalition of bodies representing private landlords, homeless charities and financial institutions, responded to this decision by issuing a joint call on the Government to publish an assessment of the impact on renters’ ability to meet their housing costs.

Other factors cited as reasons for landlords’ reluctance to let to claimants include:

  • uncertainly around the roll-out and implications of Universal Credit;
  • the payment of Housing Benefit in arrears;
  • restrictions in mortgage agreements and insurance requirements;
  • perceptions of benefit claimants as more likely to demonstrate anti-social behaviour; and
  • tax changes resulting in landlords focusing on “less risky” tenants.

The extent of the issue

There’s no definitive information on the extent to which landlords refuse to let to benefit claimants. The English Private Landlord Survey 2021 asked landlords, from a list of different types of tenants, which, if any, they were not willing to let to. 37% of landlords with five or more properties said they were unwilling to let to people receiving HB or Universal Credit.

In the wake of the finding of indirect discrimination in July and September 2020, it seemed likely that instances of blanket ‘No DSS’ adverts would disappear. However, affordability checks based on a tenant’s individual circumstances are still possible.

The issue has attracted increased attention in recent years. On 21 February 2019 the Work and Pensions Select Committee launched an inquiry into No DSS: discrimination against benefit claimants in the housing sector. The inquiry did not conclude before the dissolution of Parliament for the 2019 General Election.

The Government response

On 1 March 2019 then-Minister, Heather Wheeler said the Government was calling for “the end of housing advertisements which specify ‘No DSS’ tenants.”

The housing white paper published in June 2022 says the Government “will make it illegal for landlords or agents to have blanket bans on renting to families with children or those in receipt of benefits.”

A Renters Reform Bill is expected in the 2022-23 parliamentary session.

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