‘No DSS’ policy from lenders marks return to ‘wicked old days of housing discrimination’
The Committee said it is ‘deeply concerned’ about mortgage providers stopping landlords from renting to benefit claimants, especially in light of the desperate shortage of affordable housing.
In a case brought to the Committee’s attention in October a landlord was refused a remortgage with her lender, NatWest, because she was renting to a tenant in receipt of housing benefit.
The landlord, Helena McAleer, was told that she would either have to evict her tenant, a vulnerable elderly lady, or pay the early repayment charges and forego the mortgage, as it was the bank’s policy not to allow rentals to a ‘DSS claimant’.
The case highlighted that many lenders have a policy of not lending to landlords whose tenants are in receipt of housing benefit and Universal Credit.
There a 4.2 million people in receipt of housing benefit in the UK, but research by the Residential Landlords Association found that 66% of lenders, covering 90% of the buy-to-let market, have this kind of prohibition on lending.
Chair of the Work and Pensions Committee, Rt Hon Frank Field MP, said: “The Government claims its welfare reforms are intended to drive employment, but allowing banks to operate a “no DSS” policy is a return to the wicked old days of housing discrimination, with claimants effectively blacklisted for housing and at risk of being senselessly evicted for no greater crime than receiving housing benefit.
“NatWest is now taking a look at its policy, and other mortgage lenders will no doubt follow suit. If the change we need to protect people is not forthcoming voluntarily, we may need to look to regulation.”