Leading estate agents have been accused of turning away tenants on housing benefit, after a mystery shopping exercise found widespread discrimination.
Researchers posing as prospective tenants called 149 regional letting agent branches across England. They found that one in 10 branches had a policy of not letting properties to those on housing benefit – even if they could afford it.
Analysis by Shelter and the National Housing Federation (NHF) of the investigation named the worst offender out of six leading agents as Haart, which had a ban on housing benefit tenants in eight out of 25 branches.
The only letting agent researchers called that didn’t have any ban in place was Hunters.
However, the Equality Act 2010 states that letting agents who reject housing benefit tenants outright could be at risk of breaking the law if it is interpreted as indirect discrimination against women or disabled people.
The investigation also found a shortage of landlords who were willing to let properties to those on housing benefits, with almost half (48%) of branches saying they did not have suitable homes.
This echoes the findings of a separate Shelter/YouGov survey last August, which found that 61% of private landlords ban or prefer not to rent to tenants who receive housing benefit.
End the housing benefit ban
There are currently around 1.64 million adults who rely on housing benefit to contribute towards their private rental accommodation, and Shelter says most are women – especially single mothers with childcare responsibilities. Others receive disability benefits and are three times more likely to require help with rent.
Shelter and the NHF say they are “appalled” by the findings and have joined forces to urge letting agents and landlords to remove these bans.
Polly Neate, chief executive of Shelter, says: “This ugly undercurrent of discrimination is wreaking havoc on hundreds of thousands of people’s lives. ‘No DSS’ is an outdated and outrageous example of blatant prejudice.
“That’s why we’re urging all landlords and letting agents to get rid of housing benefit bans, and treat people fairly on a case-by-case basis.”
David Orr, chief executive of the NHF, which represents social landlords, says the chronic shortage of social housing poses a significant challenge for those on benefits.
“Landlords and letting agents must see sense and assess people on a case-by-case basis, while government urgently needs to invest in the building of new social homes.”
Problem could be “systemic”
However, David Cox, chief executive of estate agent membership body ARLA Propertymark, argues that it is a “systemic problem” that stems from how the government pays housing benefit.
He says: “Rents are paid in advance, whereas housing benefit is paid in arrears, and therefore with such a shortage of rental accommodation, landlords and agents will naturally choose a tenant who can pay the rent when it is due, rather than a tenant who is always a month in arrears.”
He adds that some landlords are restricted as to whom they can let their properties to.
“Many lenders have a clause in their buy-to-let mortgage agreements which prevent landlords from letting to housing benefit tenants. This situation does not exist because of landlords or letting agents, it is a systemic problem caused by government and the banks.”
Responding to the allegations, a spokesperson for Haart says: “It is not our policy to refuse housing benefit tenants – anyone who passes referencing checks is able to rent properties listed with our branches. We do regularly arrange tenancies for those claiming housing benefits and currently have 112 tenancies where this is the case.
“In certain instances, landlords may not be able to let properties to housing benefit tenants for a variety of reasons including lending and insurance criteria. Government policy on housing benefit, with payments made in arrears, has also made it more difficult for landlords who require rents to be paid in advance.”
Where landlords are not able to let to housing benefit tenants, the spokesperson says they will direct them towards other properties that are available.
“This research has brought to light that some of our branches are misinformed and we are working to ensure that this policy is being followed across our network. We are sorry for any occasion where this has not been the case.”
Mystery shopping research results:
| Agent names | Total number of calls | Accept people on housing benefit but no properties available - reasons unclear | Accept people on housing benefit but no properties available because landlords unable to let to housing benefit tenants | Do not accept housing benefit tenants | No properties available |
|---|---|---|---|---|---|
| Bridgfords | 25 | 2 | 6 | 2 | 10 |
| Dexters | 25 | 8 | 6 | 2 | 16 |
| Fox & Sons | 24 | 5 | 1 | 2 | 8 |
| Haart | 25 | 3 | 4 | 8 | 15 |
| Hunters | 25 | 5 | 5 | 0 | 10 |
| Your Move | 25 | 3 | 8 | 1 | 12 |
| Total | 149 | 26 | 30 | 15 | 71 |
| Total (%) | 149 | 17% | 20% | 10% | 48% |
| Source: Analysis by Shelter, Mystery shopping fieldwork carried out by independent MRS accredited research agency Mystery Shoppers Ltd. Responses are only categorised in the table above if they definitively meet the criteria, any with any element of doubt are not included. |
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