Banks stop landlords renting to DSS tenants

Mortgage lenders have once again been criticised for not permitting landlords to rent property to people claiming benefits – this time by MPs.

The Work and Pensions Committee is urging the government to address concerns that lenders are increasingly adopting “no DSS” policies.

Research by the Residential Landlords Association (RLA) last month found two-thirds – 66% – of mortgage lenders representing 90% of the buy-to-let market refuse a loan where a tenant is claiming benefit.

The RLA also called on the government to tackle discrimination against benefit claimants after it emerged last month that NatWest told one landlord that she would either have to evict her tenant of two years, or take her mortgage business elsewhere, after a blanket ban by the bank on benefit claimants.

The bank’s own buy-to-let eligibility criteria notes: “We will not consider multiple tenancies, Homes of Multiple Occupancy, bedsits, DSS tenants or ‘Related Person’ tenancies.”

The landlord, Helena McAleer, who lets out a home in Northern Ireland, refused to evict her tenant, a vulnerable older woman who always paid the £400-a-month rent on time for more than two years, after being denied a remortgage by NatWest and instead moved her loan to another provider. She has since launched a petition calling for an end to such discrimination.

The petition has so far attracted 4,857 signatures, which is just under the 10,000 signatures needed to get a response from the government.

Frank Field, chairman of the Work and Pensions Select Committee, commented: “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.”

He added: “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.”

Written by: Houseladder