No DSS: You can’t live here

Shelter and the NHF have accused lettings agents and landlords of slamming the door on housing benefit claimants, but are they carrying the can for culprits higher up the policy food chain? 

By Mark Cantrell 

DISCRIMINATION is ugly however and wherever it occurs. But with social security benefits cut to the bone and recipients treated to a politically manufactured ‘hostile environment’, perhaps it’s not so much landlords and lettings agents who are guilty of ‘No DSS’ – but ministers who have been eager to ‘roll back’ the state.

In August, Shelter and the National Housing Federation (NHF) released a report that pointed an accusing finger at the private lettings industry. In it, the organisations claimed that five leading letting agents were actively discriminating against tenants on housing benefit, or Local Housing Allowance (LHA), as the benefit for the private rented sector is called.

An investigation carried out on their behalf by Mystery Shoppers Ltd is said to have found a strong likelihood that prospective tenants on housing benefit would be rebuffed. During the research, 149 regional letting agency branches were called by researchers posing as people looking to rent a home.

It is claimed that one in 10 of the branches contacted had a policy not to let a property to anyone on housing benefit, regardless of whether they could afford the rent. Haart was the worst offender, according to the research; with an “outright ban” on housing benefit tenants in eight of the 25 branches contacted. The only letting agent with no bans in place was Hunters, scoring zero out of 25. Furthermore, almost half (48%) of branches contacted said they had no suitable homes or landlords willing to let to someone on housing benefit.

It’s sobering to consider that people are being turned down for a home simply because they are in receipt of benefits. But as recent research conducted on behalf of the Chartered Institute of Housing shows (see below), cuts and freezes have left even the cheapest end of the private rental market unaffordable. It’s chilling to consider that Government welfare policy effectively engineers exclusion from housing.

Shelter and the NHF claim that that situation is not only “grossly unfair” but potentially unlawful – because of the way inequality and poverty afflicts different sections of society.

Of the estimated 1.64 million adults reliant on housing benefit to help meet the cost of private sector rents, the two organisations claim the majority are women, especially single mothers with childcare responsibilities. People who receive disability benefits are also three times as likely to need a housing benefit top-up.  As a consequence, so-called ‘no DSS’ may be in breach of the Equality Act 2010 because of indirect discrimination against women and disabled people.

“This ugly undercurrent of discrimination is wreaking havoc on thousands of people’s search for a home,” said Polly Neate, Shelter’s chief executive. ‘No DSS’ policies are outdated and an outright example of blatant prejudice.

“Private renting is now so expensive that many people simply can’t get by without some housing benefit – even if they are working. At Shelter we often hear from families pushed to breaking point after battling repeated rejections because of housing benefit bans.

“Practices that blindly reject all housing benefit tenants are morally bankrupt, and because they overwhelmingly impact women and people with disabilities, could be unlawful. That’s why we’re urging all landlords and letting agents to get rid of housing benefit bans and treat people fairly.”

David Orr, who was then the NHF’s chief executive, said: “Many housing associations were set up in the 50s and 60s to house people who could find nowhere else to live due to blatant racism from private landlords and letting agents who told them ‘no Irish, no blacks, no dogs’. Letting agents should be ashamed that discrimination is still happening today in the form of an outright ban on people simply because they depend on housing benefit. We know this is purely based on prejudice.

“The homeless shelters and charities housing vulnerable people that we represent find it increasingly impossible to help their residents move in to their own independent home. Often, no privately rented homes will [take] people on benefits and the chronic shortage of social housing means often none of this is available.”

Welfare reform undoubtedly muddies the water; it can and does serve to discourage, much like the Government’s ‘right to rent’ immigration policy was found to be dissuading landlords from renting to ‘foreigners’ legally entitled to be in the country. For the landlords, presented with becoming de facto border guards, tasked with checking papers, it was a case of better safe than sorry.

The well-documented problems with Universal Credit, chief among them its propensity to push tenants into rent arrears, isn’t just a source of income uncertainty for private landlords; it’s long been a thorny issue for housing associations and council landlords too.

It’s a point not missed by John Stewart, landlord and policy manager for the Residential Landlords Association (RLA), who hit back with a blog on the organisation’s website, in which he said the Shelter/NHF research “fails to scratch the surface” and “offers no solutions”. He was clearly miffed.

“Benefit levels rarely cover market rent,” he wrote. “Whether it’s the four-year freeze on LHA rates, the capping of LHA, or the so-called bedroom tax, there are very few private rented properties within the financial reach of benefit recipients. ‘No DSS’ is a short-cut to prevent tenants spending time and money applying for properties they could never pass referencing for.”

David Smith, the RLA’s policy director, said that it is the RLA’s position that landlords must make their decisions “fairly on a case-by-case basis”.

“The legal position is unclear, but a blanket ban is potentially unlawful, unless of course a landlord’s lender specifically prohibits them renting to people in receipt of benefits in their mortgage conditions,” he added.

“Although fewer lenders have these conditions now, there are tens if not hundreds of thousands of mortgages already in existence that do, and this is something that needs to be addressed by UK Finance…

“Research shows that fewer landlords are willing to rent to claimants as benefits, including Universal Credit, are still largely paid in arrears, making it more and more challenging for those receiving them to pay their rent in full and on time.”

For its part, Haart said its policy stated “we will not discriminate against any tenant or applicant for any reason”. Furthermore, the company said it had contacted all its branches to emphasise that position.

“It is our responsibility to attract the largest number of tenants for the landlords who are our clients,” said chief executive, Paul Smith. “Clearly, it is up to landlords what policies they wish to pursue, and we will conform with their wishes so long as they are legal. We do arrange tenancies for tenants in receipt of housing benefit and currently have 112 tenancies where this is the case.”

Back to the RLA, and Stewart went on to poke the social sector in the eye with a suggestion it’s not quite so virtuous as it might like to make out. “Perhaps the most galling part of the report is the involvement of the National Housing Federation, effectively the union for social housing providers… who routinely reject prospective vulnerable tenants by applying strict affordability tests,” he said.

“Who have moved into the market rental sector, often in partnership with big, build to rent corporate investors to provide high-end housing to working professionals, but complain that they can’t build social houses any more.

“While there may be some truth that vulnerable tenants are struggling to find social housing because of a lack of Government support for the sector, the hardnosed business practices of many housing associations must carry its share of the blame.”

Feelings have been stung, evidently. But one thing is certain in all this furore – it’s the blameless who are carrying the can. We need more social housing, before things get really ugly.

# # #

Frozen benefits leave low income tenants out in the cold

In what might be considered the flipside of the ‘No DSS’ furore, research for the Chartered Institute of Housing reveals there’s another way to exclude people – simply price them out by cutting benefits

PEOPLE on low incomes face a cruel dilemma – forego food or heat to help pay the shortfall – because housing benefit for private tenants no longer covers even the cheapest rent.

Research from the Chartered Institute of Housing (CIH) amounts to yet further evidence of the UK’s desperate need for more social housing, as those on the lowest incomes struggle with the double whammy of rising housing costs and the impact of welfare reform that has whittled away state support.

“Our research makes it clear just how far housing benefit for private renters has failed to keep pace with even the cheapest private rents,” said CIH chief executive, Terrie Alafat. “We fear this policy is putting thousands of private renters on low incomes at risk of poverty and homelessness. We are calling on the Government to conduct an immediate review and to look at ending the freeze on Local Housing Allowance (LHA).”

LHA, the housing benefit paid to private renters, was originally designed to cover the cheapest 30% of the local housing market, but according to the CIH’s research this is now no longer the case for 90% of the rates across the UK.

The rate was frozen for four years in 2016, but it is said to have fallen so far behind even the cheapest rents that private renting has become unaffordable for most low-income tenants. For those caught in the bind, they are forced to choose between basic living expenses and paying the shortfall.

Consequently, they face a much greater risk of become homeless. “This report highlights just how much housing benefits for private renters are falling short of the levels needed, leaving many homeless people stuck in a desperate situation and putting yet more people at risk of homelessness,” said Matt Downie, director of policy and external affairs at Crisis.

“There are 236,000 people across Britain experiencing the worst forms of homelessness – this includes those sleeping on the streets, living in unsuitable hostels, and sofa-surfing. In many of these cases, people simply can’t find a home because there isn’t enough social housing and housing benefits are too low to cover private rents.

“Homelessness is not inevitable – there is clear evidence that it can be ended with the right policies in place. The Government must urgently reform housing benefits for private renters, so they not only match the true cost of renting but also keep pace with future rent changes.”

NH

This article first appeared in Northern Housing magazine #2 October 2018

%d bloggers like this: