Why do landlords refuse to let to housing benefit / DSS tenants?
And what can be done about it?
The tenants organisation DIGS is organising a #YesDSS campaign this month. They are angry that so many landlords and letting agents in London refuse to let to DSS tenants.
This is set out on the DIGS website here in a post which makes several points:
- That ‘No DSS’ is a form of discrimination
- Many people have no choice but to claim benefits
- Social housing is being reduced and is ‘under attack’ by government
- ‘No DSS’ leads to homelessness and increases stress, and
- Landlords and letting agents have got away with too much for too long
The article ends up by saying
Letting agents blame “No DSS” on landlords; landlords blame it on council bureaucracies, mortgage lenders and insurers. Yet the truth is that all of these people need to take proactive responsibility for ensuring that no-one is denied a decent, secure and affordable place to live simply because they don’t earn enough money.
The article links to David Lawrenson’s (rather good) article in the guardian on why landlords won’t let to DSS tenants but does not really address the points he makes.
The problem
I agree that it is disgraceful that so many decent hardworking people are unable to find somewhere to live, just because they need to claim benefits to support themselves.
However, I think that the DIGS campaign is targeting the wrong people.
There is a big difference between the private and the social sector.
- The private sector is largely made up of ordinary people who have purchased one or two properties as an investment – for example, to supplement their pension or provide for their families
- The social sector consists mostly of not for profit organisations whose ‘raison d’etre’ is to provide modest cost accommodation for people of modest means.
Now clearly it is the social housing sector which is best suited to provide housing for housing benefit tenants. Unfortunately though, it is currently haemorrhaging properties through right to buy which are not being replaced.
As DSS tenants are clearly unable to buy their own home, this leaves them nowhere else to go but the private sector.
Why private landlords won’t / can’t let to DSS tenants
It’s all very well for the author of the article on the Digs site to brush off the points made in David Lawrenson’s article, but this is not something landlords can do.
For example – insurance. It is essential that landlords insure their properties – this is both for their benefit and for their tenants benefit. However, many landlords will understandably baulk at paying extra insurance premiums if they take DSS tenants.
Then, if their buy to let mortgage prohibit DSS tenants, they can’t do anything else BUT refuse to take them. If they don’t, they risk increased interest payments or (worst case scenario) foreclosure by the mortgage company. THAT is not going to help the tenants either.
However, I suspect that the biggest problems faced by landlords with DSS tenants are the problems with local authorities.
For example, comments on the Landlord Today report here make the following points:
- They change the allowances to tenants with no warning,
- They backdate enormous (and often fictitious) overpayments which the tenant has no hope of paying.
- They start and stop payments as they wish with no regard for the landlord’s contract with the tenants
- They insist on paying in 4 week cycles instead of calendar month like everyone else
- The council teams are incredibly rude and aggressive to agents and Landlords alike
- They actively encourage defaulting tenants
The first commenter ends by saying
After 10 years of accepting DSS tenants we stopped in Jan 2015 after too many bad experiences- not with tenants but with councils
You may also want to take a look at Kate’s Story on this blog – a true story where a landlord tried to help a DSS tenant but ended up losing out.
Why SHOULD private landlords act to their disadvantage?
Why would any landlord voluntarily let to a tenant where there are likely to be all these problems, when there are plenty of non-DSS tenants around?
To answer the comment from the Digs author
all of these people need to take proactive responsibility for ensuring that no-one is denied a decent, secure and affordable place to live simply because they don’t earn enough money.
I would say ‘why should they?”. They are private individuals, not charities. It’s not their job to house the homeless.
And unless they are ‘stinking rich’ (which most small landlords are not) I don’t even think they have a moral duty to do this. Their duty is to their own families.
Letting agents are of course just the businesses who manage the properties, and are duty-bound to get the best financial return for their customers – they would be negligent if they didn’t and could be vulnerable to compensation claims. Although no doubt their staff will also want to avoid problems with ‘difficult’ local authorities.
The real problem
The real problem is that instead of social housing stock being increased, which is what is desperately needed, it is actually being reduced.
Government seems to be hell bent on doing all it can to increase the ‘right to buy’ sell-off and make it difficult for Housing Associations and other social landlords to build any more.
Thus completely ignoring the needs of DSS and other low-income families who have nowhere else to go. For example, they can hardly stump up the 1/2 million or so needed for an ‘affordable‘ property in London.
Possible solutions
It goes without saying that Local Authorities and Housing Associations should be encouraged to build and acquire property to let to benefit tenants.
There are also other traditional and innovative solutions that could be looked at, such as
- Compulsorily acquiring some of the many properties lying empty
- Using unused areas of land to house the homeless in cheaper and quickly erected ‘container’ and ‘popup’ housing such as is being done in a few places
- Encouraging people to build their own homes from standard parts, as was done here
(Give us your suggestions below!)
These are the sorts of things that tenants organisations should, in my view, be focusing on.
Finally, there are still (I hope) some private landlords, generally landlords with larger portfolios, who are prepared to take on DSS tenants. However, they are generally very experienced in this work, will usually insist on payments being made via a credit union and invariably require a home owning guarantor.
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