Metro Bank is scrapping restrictions on landlords with buy-to-let mortgages from renting to tenants claiming benefits after pressure from the government.
It follows a roundtable at Downing Street led by housing minister Heather Wheeler which looked at 'no DSS' buy-to-let mortgages.
The government says the rules preventing landlords renting to tenants on benefits is “potentially discriminatory” and that thousands of families could benefit from changes.
In recent weeks big names such as Rightmove and Zoopla have said they will no longer post adverts from landlords that refuse to rent to people on benefits.
The government says that restrictions on benefit claimants have no place in a modern housing market and that it wants to introduce a “blanket ban” on the practice.
Ms Wheeler says: “Regardless of financial circumstances, everyone should have the same opportunity when looking for a home and I have been determined to end the discrimination those on benefits face.
“Today’s meeting was yet another step forward, marking an important shift in making the private rented sector fairer for all – and I am thrilled that Metro Bank have decided to join us in ending the stigma surrounding tenants on housing benefit.
“I am grateful to those companies for taking the time to discuss this issue, and look forward to us continuing to work together."
Andy Piggott, director of lending products at Metro Bank, says: “Over recent months we have been working closely with a number of industry stakeholders including the Ministry of Housing, Communities and Local Government, housing charity Shelter and our clients to better understand the challenges facing landlords and their tenants.
“Following an extensive review, we can confirm that we will be changing our buy-to-let lending policy to enable landlords with buy-to-let mortgages to let to people claiming benefits.”
Banks are coming under increasing pressure to change their buy-to-let rules so that landlords are allowed to rent to tenants receiving housing benefit.
Earlier this year, high street bank NatWest said it was scrapping restrictions on landlords with buy-to-let mortgages from letting homes to benefit claimants.
Around half of landlords say they would not be willing to let to tenants on housing benefits, according to the Ministry of Housing, Communities and Local Government (MHCLG).
With 4.5 million households in rented accommodation, and 889,000 of these in receipt of housing benefit, it is possible that thousands of vulnerable people could struggle to access the rental market.
MHCLG minister, Will Quince, says: “We are working to bring the sector together to tackle this issue, ensuring everyone has the same opportunity to access safe and secure housing.
“It’s encouraging that we’re already seeing positive changes being made in the industry, and we continue to encourage landlords and agents to consider tenants on an individual basis.”