Can private landlords refuse to let to benefit claimants and people with children?

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.

More recently, adverts for private rented properties have specified ‘no kids.’

Findings of unlawful discrimination

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.

In 2023, the Property Ombudsman deemed a ‘no kids’ specification in the private rental market to be a breach of the Property Ombudsman’s code of practice on grounds that such a ban would breach equality rules because it would disproportionately affect women.

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 have been introduced. LHA rates were frozen from April 2016 for four years. This added to landlords’ concerns about the gap between LHA and market rent levels.

• Although LHA rates were increased in 2020/21, they’ve subsequently been frozen in cash terms. Inflationary pressures over 2022/23 have led to more calls for a review and uprating. The Levelling Up, Housing and Communities Committee (February 2023) recommended the Government should ensure housing benefit covers recipients’ 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

Why do landlords specify ‘no kids’?

Shelter has been told by Mortgages for Business that there are no mortgages with ‘no kids’ clauses. Similarly, the British Insurance Brokers Association has said landlords should not face issues in finding suitable / affordable insurance when renting to tenants with children. This has led Shelter to conclude that the only objective justification for refusing to let to someone with children is if the property would be unsuitable from an overcrowding point of view.

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 covering the period 2021-22 found one in ten private renters who said they’d been refused a tenancy in the past 12 months because they received benefits. This amounted to 10% of private renters, around 109,000 households.

After the findings 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.

In relation to children, a YouGov survey conducted between 6 April and 12 May 2022 of private renters in England aged 18+, 627 of whom had children in the household, was weighted to be representative of private renters in England. On this basis, Shelter calculated that 289,506 families had been affected by a ‘no kids’ stipulation.

A commitment to end blanket ‘no DSS’ and ‘no kids’ requirements

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 said 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.”

The Renters (Reform) Bill was presented on 17 May 2023. It was expected to include measures on blanket bans in relation to benefit claimants and families with children. Those measures are not in the Bill. The Government said it remains “fully committed” to implementing these reforms and will bring forward legislation at the “earliest opportunity” to:

Make it illegal for landlords and agents to have blanket bans on renting to tenants in receipt of benefits or with children – ensuring no family is unjustly discriminated against when looking for a place to live.