Renting To Tenants On Benefits Ads
Joanne Young of Ashfords LLP says UK’s millions of risk-averse small-portfolio landlords will sell up rather than face the hassle and risk of renting to tenants on benefits.
“Earlier this month the Ministry of Housing, Communities and Local Government announced a number of measures aimed at further tackling homelessness, including funding to help potential new tenants with rental or first month rent payments. However, it was a different measure that dominated the headlines and could prove more controversial than intended.
The Government has set its sights on tackling landlords and letting agents who (in its words) ‘potentially discriminate’ against renting to tenants on benefits. The Government says just under 890,000 of the 4.5 million private renting tenants are in receipt of benefit – a figure the Government is seemingly keen to increase.
The proposal is that Government will meet with representatives from across the lettings spectrum to discuss “clamping down” on “blanket ban” adverts – with the potential of having a complete ban on “no DSS” adverts in the future.
The ideology that lies behind the proposal is hard to argue against. The rise of street homelessness is apparent in every town in the country – and hidden homelessness and ‘sofa surfing’ has also increased.
The far from smooth implementation of Universal Credit has been well-publicised. Trying to encourage private landlords to accept tenants who are in receipt of benefits and give those individuals an opportunity to obtain a place they can call home is an entirely admirable aim.
NOTE OF CAUTION
However, I cannot but help to sound a note of caution. I have attended numerous landlord events over the years where entirely well-meaning and enthusiastic representatives from the Department for Work and Pensions who try to ‘sell’ the benefits system to private landlords. It is a tough gig! Many private landlords in England are small-scale, their lettings portfolio may only comprise one or two properties.
Letting is not their ‘business’ and they do not have the time, resources, or frankly the inclination to spend time chasing tenants (or the benefits agencies) about unpaid rent.
They want tenants who will pay rent in full and on time, with no risk that the rent they receive could be clawed back from them in some circumstances. They want tenants who seemingly have the financial means to be pursued in the event damage is caused to their property.
Rightly or wrongly, this does therefore lead many private landlords to prefer tenants who will not be relying on benefits to pay the rent.
For these reasons, I am of the view that the Government may therefore be wasting its well-meaning time in this venture. Even if there were a complete ban on landlords and their agents excluding benefit recipients when advertising for properties, I suspect that, once the potential tenant’s financial situation was made known, many landlords would refuse to proceed with the letting.
All that a ban would do therefore is simply waste the time of both parties in cases where a landlord would not consider a let to a benefit recipient. Only a complete ban on landlords being able to refuse tenants on benefits would tackle this problem – but given many small-scale private landlords are already leaving the market, such a ban would almost certainly see a larger exodus.
It will be interesting to see how this pans out.”