Momentum is building in the campaign to end ‘No DSS’ discrimination against private rental sector tenants in receipt of housing benefit.
Late last week the government revealed that it was clamping down on any apparent bias by agents and landlords against tenants receiving benefits.
Now one of the largest buy to let lenders, NatWest, says it’s responding to lobbying by - amongst others - Shelter and the Residential Landlords Association in a bid to relax its lending policy to buy to let investors who house benefit tenants.
John Stewart, policy manager for the Residential Landlords Association, says: “We warmly welcome today’s announcement from NatWest. Around 20 per cent of all private sector tenants are in receipt of benefits and we need to do all we can to support them to find the homes they need. NatWest’s decision will make it easier for landlords to rent to benefit claimants, and agree long term tenancies where suitable. We urge other lenders to follow this lead.”
NatWest’s changes will affect new and existing landlords with fewer than 10 properties.
The bank has also decided to extend the maximum length of time of assured shorthold tenancy from 12 months to 36 months, which allows landlords to offer tenants the security of longer tenancies.
The policy change will apply with immediate effect to both new and existing customers and will apply to NatWest, Royal Bank of Scotland and Ulster Bank.
Speaking about the changes, Ian McLaughlin, managing director of Home Buying & Ownership at NatWest, says: “I am pleased that we are introducing these changes and extending our policy to support smaller landlords in this segment of the market. We would like to thank Shelter and the Residential Landlords Association for their thoughtful and thorough contributions to the review, to help us better understand the market in this area, and bring our policies in line with those in our commercial segment.”
Meanwhile the first meeting between government officials and bodies including the Association of Residential Letting Agents and the major landlord trade organisations, to discuss the issue, is believed to be planned for later this month.
Out of 4.5m households living in private rental accommodation, 889,000 receive housing benefit to help pay their rent. However, the MHCLG says latest figures show around half of landlords said they would not be willing to let to tenants on Housing Benefit – ruling out thousands of vulnerable people and families.
The Residential Landlords Association has been a long-standing critic of the 60 per cent or so of buy to let lenders who ban landlords from renting to tenants on benefits.
“Landlords should not refuse someone solely because they are on benefits, and should consider prospective tenants on a case by case basis,” says John Stewart.
“But with growing numbers of benefit claimants now reliant on the private rented sector we need to do more to give tenants and landlords greater confidence in the benefits system.”
The National Landlords Association has also commented on the government’s initiative, saying: “The NLA recognises that a blanket ban on tenants in receipt of benefits can appear unfair and is poor practice. However, we continue to emphasise to government the importance of landlords considering circumstances on a case-by-case basis, with landlords making a business decision on who to agree a tenancy with.”