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Can private landlords refuse to let to Housing Benefit claimants?

Published Tuesday, April 3, 2018

This briefing paper considers evidence of private landlords' reluctance to let to prospective tenants in receipt of Housing Benefit/Universal Credit. The paper looks at the reasons behind this reluctance and why refusing to let to benefit claimants is unlikely to amount to direct discrimination.

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Discriminating against Housing Benefit claimants?

It is not unusual for private landlords to advertise properties to let stating that they will not accept applications from HB claimants. This often raises the question of whether such restrictions amount to unlawful discrimination. It is unlikely to amount to direct discrimination as income and employment status are not protected characteristics under the Equality Act 2010.

Why do landlords refuse to let to Housing Benefit claimants?

Historically, landlords were reluctant to let to HB claimants because of delays in processing HB applications, but since April 2008 a key factor influencing landlords has been the introduction of the Local Housing Allowance and the requirement that this, except in certain specified circumstances, is paid to claimants rather than landlords. Restrictions on the level of LHA paid to claimants 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 have been introduced; for example, LHA rates have been frozen since April 2016 and will remain so until April 2020. This has added to landlords’ concerns about the gap between LHA and market rent levels. Evidence of disparities between actual rent levels and LHA rates payable submitted to the Communities and Local Government Select Committee’s inquiry into homelessness (2016) led the Committee to recommend that “Local Housing Allowances levels should also be reviewed so that they more closely reflect market rents.”

Other factors cited as reasons for landlords’ reluctance to let to HB 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; and
  • tax changes resulting in landlords focusing on “less risky” tenants.

A growing problem?

There is no definitive information on the extent to which landlords are refusing to let to HB/LHA claimants. Reported landlord survey evidence suggests that there has been an increase in the proportion of private landlords who are unwilling to let to HB claimants.

 

Commons Briefing papers SN07008

Author: Alex Adcock

Topics: Housing, Housing benefits, Private rented housing

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