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Graham Awards


Bank scraps 'No DSS' BTL mortgage rule after pressure from ministers

The government says thousands of families could benefit from changes to mortgage rules announced by Metro Bank.

Currently the bank prevents landlords renting to tenants on housing support but the change of heart follows a Downing Street meeting on the issue led by housing minister Heather Wheeler MP. 

The Metro pledge is the latest from sectors of the industry promising to end potentially discriminatory practices such as ‘No DSS’ adverts, and follows similar moves in recent weeks from big names such as Rightmove and Zoopla.


Wheeler says that whilst the vast majority of the private rental sector provide a fair and professional service, ‘No DSS’ has no place in a modern housing market and the government is determined to introduce a blanket ban on this practice.

“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” says Wheeler.


“[The] 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.”

Poll: Is scrapping 'No DSS' the right thing to do?


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    My guess is that Government have told Metro Bank, knowing Section 21 removal is a done-deal (what the lender of a repossession would also rely on), they will create new legislation allowing them possession of a property that's been repossessed.

    That allows them to continue their LL-bashing without upsetting their banking friends and removes any 'convenient' 'excuse' to "No DSS" from LLs when challenged by Shelter.

    It also explains why banks appear virtually silent on the fact that Section 21 is 'under threat' (it's definitely going as far as Government is concerned).

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    Landlords, agents, banks and insurers don't choose to say 'no DSS' for a laugh, its done for very obvious and practical reasons. Nevertheless there will be some tenants who would be considered 'DSS' who do not deserve to be tarred with the same brush so what would be ideal would be a far better method of referencing potential tenants but I have no idea what method that would or could be in a society which is keen to appear to preserve people's privacy and 'rights'. On the other hand, at least we don't live in Hong Kong or Mali ....

    • 12 June 2019 10:20 AM

    It is bit political that is the problem.
    Underwriters could just as easily state no tenants to be insured who engage continuously in highly noxious cooking due to the damage it does to the internal fabric of a property.
    To charge HB tenants more is just not fair.
    There are good and bad HB tenants just as there with private tenants.
    Receipt of HB doesn't automatically make you a wrongun and certainly no greater risk than a private tenant.


    @Paul Barrett, some of the reasons why it often does not make sense to accept people on benefits as tenants:

    1). Tenants on benefits often cannot afford the rent. This is partly because benefits have been capped and have not kept pace with market rents. Housing benefit on average only covers 57% of the cost of a private rental. What I want to know is: why would a person agree to rent a home to someone who so clearly cannot afford to rent it?

    2). The housing element of benefits, including in the new Universal Credit system, is paid in arrears, and landlords need the money in advance as that is when they pay their mortgages. Working tenants pay in advance and are therefore able to meet the terms of the tenancy agreement.

    3). If for some reason the tenant does not make the benefits claim in the right way, on time or at all, or if they do not turn up for an appointment, lie or make a mistake in reporting on any work they’ve done for example, the benefit can be stopped. The landlord then does not receive the rent because of something the tenant did or didn’t do. Large amounts of arrears can accrue in this way, which the landlord will not get back.

    4). If it is discovered that the tenant in some way claimed fraudulently, the authorities have been known to threaten the landlord and/or ‘clawback’ the money by not paying the rental element for another claimant the landlord is housing. A landlord was recently threatened with having to pay back 4 years of the housing element paid to him, because of a fraud by the tenant. What landlord wants to face this prospect, when they can simply house people in work?

    5). If a tenant does not pay the rent and is evicted owing a lot of arrears and/or having caused damage to the house and the landlord has incurred legal and court fees, with a working tenant they can apply for an attachment of earnings and eventually the debt can be repaid to them. With a tenant on benefits there is no employer on which to apply an attachment. There is therefore no way the landlord can ever recover the debt.

    6). If a tenant is on benefits and/or on low wages, they may struggle to heat the house. Without proper heating and ventilation, the house may fall into disrepair. If the Environmental Health Officer then calls around, they will most likely blame the landlord for the disrepair. So the landlord’s home is adversely affected and they then face possible fines.

    7). People on benefits naturally spend more time at home. This increases wear and tear on the property.

    8). Often insurance companies and lenders specify that they will not accept tenants on benefits. In such circumstances, if the house burnt down for instance, the landlord’s insurance would be invalid. In terms of contravening the lender’s requirements, the landlord could face the liquidators being called in if the lender finds they have contravened the terms of the mortgage. The landlord could face a demand to immediately pay back the capital; this will usually be impossible. The landlord in this situation would face huge losses, purely because they had accepted as a tenant someone on benefits.

    9). Because of the Government’s fiscal attack on private landlords – most outrageously and absurdly in Section 24 of the Finance (no.2) Act 2015, which means landlords now cannot offset the finance costs of their businesses before calculating profit – it is imperative that landlords select the tenants with the greatest means and get the rents as high as they can go. This is not for the landlords’ benefit, but rather to pay the huge new tax liability, which can exceed 100% of actual profit. This is explained in a briefing paper I wrote for the Institute of Economic Affairs with the economist and professor Philip Booth. Taxation without justification — Institute of Economic Affairs

    10). Also, if Section 21 is scrapped, landlords face tenants being granted lifetime tenancies. If this is the case, then landlords will want the best possible tenants to occupy their properties – ones who have no problem paying the higher rents forced on the sector by the Treasury and ones who, as mentioned, can afford to look after the house properly. This will greatly restrict the options for those on benefits. As the economist Ryan Bourne has stated: “The results of this policy are therefore obvious to anyone who understands basic economics. First, landlords will be far less likely to rent to tenants they consider high-risk. The incentive to engage in serious vetting, demanding extensive guarantees from tenants, will skyrocket.

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    • 12 June 2019 10:13 AM

    LL only discriminate against HB tenants for business reasons.
    They have nothing against HB tenants per se.
    If Govt wants to level the playing field as they are allegedly so keen on doing then doing just one simple thing would transform the PRS for the better for all.
    That is for ANY tenant in 2 month's rent arrears which is one month and one day when advance rent is paid to be able to be removed by the LL 14 days later with NO requirement to go to court.
    If the tenant refuses to vacate then the LL may request police assistance to remove the tenants.
    This change need only be for rent arrears cases.
    All other cases would continue with the existing court process.
    Surely such a measure would be supported by all right thinking citizens on the basis that nobody would support a tenant not paying rent because of how long it takes to currently remove a rent defaulting tenant!!!!!!!!!!?????

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    Rule number One, do not rent to anyone on HBs or UC or daily Curry eater or has Pets or does not have proof of employment and proof of income or previous address or clean credit or a single parent. Golden rules advertise it like that and Stop All your time wasters.

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    10 good points from Luke, but would add one more. Councils in my area (and i assume others too) will not help a housing benefit tenant until bailiffs turn up, meaning LL's have to pay extra for all the court fees, bailiffs and generally wait 6 months to get their home back (and normally after they have managed to secure a lack of repairs notice (as we have had a few where they wont allow the landlord in so couldn't do the repair, but guess what, the judge found on the side of the tenants even with all the written evidence!))

    Then again when has the government listened to the people working on the coal face with day to day general matters rather than people in ivory towers who don't know necessarily what is going on (with some of the bigger ones, even within their own business)
    I have zero problems with housing benefit tenants (as they can be as bad a working ones), however, the system is a joke, so stop punitively bashing landlords and get your own governments house in order. As a rule we will keep refusing tenants on benefits until the system changes and helps landlords

    S l
    • S l
    • 12 June 2019 22:14 PM

    if judges find agains LL despite evidence, then its worth appealing until justice is serve. Surely judges does not have prerogative over the interpretation of the law against evidence provided which clearly proved the tenant to be in the wrong. Dont forget, you can actually complained about the magistrates for this so they dont get to do that again against another LL base on their own prejudice rather than evidence provided.


    Unless you have very deep pockets and are prepared to wait a spectacularly long time, appeals do not exist.

    The County Court Judges have exactly prerogative over interpretation of the law., and it’s complete pot luck.

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    Nobody seems to have mentioned that "No DSS" is a breach of the Equality Act 2010 (as amended) and discriminates against disabled people for example. It's supposed to indicate no Housing Benefit Claimants, (superseded by Universal Credit) but such a sweeping statement indicates one size fits all and that's not the case.


    “No DSS” does not breach The Equalities Act. Utter nonsense.

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    • 12 June 2019 20:11 PM

    @Luke P
    Excellent post.
    Very effectively illiterates exactly why I REFUSE to ever take on HB tenants.
    It is not really the tenants themselves it is the pathetic system that allegedly serves them along with the pathetic eviction process.
    Govt doesn't seem minded at all to address all the very relevant issues you have so pertinently pointed out.
    Govt just doesn't seem to understand that LL do not need to take on HB tenants anymore.
    There are lots of far more profitable tenants out there not reliant on HB.
    I well remember Govt believing that by reducing LHA rates to the 30th percentile of the BMRA that this would cause rents to be cheaper!!!!!!!!!!!!!!!!!!!
    My rents are now DOUBLE the LHA rate so of course HB tenants will NEVER be able to afford my properties.
    Govt is seemingly Incapable of understanding that it cannot constrain a market with a political straitjacket!!
    So no surprise that homelessness is increasing and is only made not noticeable by Govt expending billions in DHP.
    LL etc know exactly what is going on but Govt has been allowed to get away with their political policy of the OBC and LHA freeze when in actuality it has been a completely failed policy.
    It would have been far cheaper to pay slightly more in market rents rather then the horrendous costs of TA to say nothing of the costs tangible and otherwise with the domestic upheaval of tenants having to vacate because their HB etc is insufficient to meet the LL requirement for a market rent.
    Of course Labour aren't saying much as they support S24 which is a major reason why LL are getting rid of HB tenants!!
    Smoke and mirrors!!

  • S l
    • S l
    • 12 June 2019 22:10 PM

    Funny how the article claimed cant tar all hb with the same brush and yet the government is doing the exact same thing to the LA and LL in PRS

  • Suzy OShea

    Sorry! The government has created this terrible situation by cutting housing benefits and insisting that the tenant must be at least two months in rent areas before they will entertain the idea of paying the landlord directly! Housing benefits offices themselves take between six weeks to two months from the submission of the claim to payments! The housing benefits departments effectively force loans on ndlords


    Take a homeowner guarantor and lay down the law from day one (that they will have to pay come what may with benefits). Pressure guarantor if missed, serve S.21 at four month mark if not compliant.

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    • 13 June 2019 00:55 AM

    Interesting case with regards to incompetence of DWP JC
    Tenant now 13 months in rent arrears.
    Tenant submitted HB application in Oct 2018
    I submitted UC 47 in November 2018.
    Nothing heard.
    Tenant warned not to submit a third HB application.
    I eventually managed to have an email sent via a sympathetic DWP manager at a different office from where the HB claim has been submitted.
    Received a reply a few days ago.
    Now just get this to prove how useless and incompetent the Harlow JC are.
    Their manager has stated in an email that the reason the HB claim has been rejected was because there was no valid AST at the time of submitting the HB claim.
    So work this out.
    AST for 6 months signed on April 1st 2018. Two month's rent paid. Then no rent from June 2018.
    So AST was for 6 months expiring in September.
    As per the AST terms it proceeded onto a Statutory Periodic Tenancy.
    This was the AST the tenant used as part of his HB claim.
    Now this will really dumbfound you.
    The DWP Manager no less has stated via email that the HB was rejected as there was no FTT AST in place at the time of the application!!!!
    Now there is NO requirement to have a FTT in place when making a HB application.
    It would be somewhat strange for the DWP to expect a LL to issue a new AST for 6 months when the tenant was already 6 months in rent arrears!!!!!!!!!!!!!!!!
    I have requested for an interview under caution with a DWP Fraud Investigator; not for me but for the fraud perpetrated on my tenant and I by the DWP Manager!!!!
    You really could not make it up.
    The Harlow JC do not seem to understand that an AST is valid until a tenant has signed a surrender letter along with the keys returned or has been evicted.
    This is basic stuff.
    How can they be so incompetent!?
    I have NEVER heard anything so ridiculous that unless a FTT is in place within the FT period that it is NOT a valid AST.
    Just beggars belief that we have these incompetents controlling our business.
    I have only ended up with a HB tenant because his role was made redundant
    He was on good wages etc
    Anyway the idiots have now replied that it will go to a Stage 1 complaint etc.
    As I know sweet FA about the new UC system I am instructing Caridon to sort things.
    I am simply amazed at the level of incompetence shown by the Harlow JC.
    Councils wonder why we don't want to take on their homeless!!!!!!?????

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    Always said it clueless useless council tax thieving thick bods.

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    Always said it clueless useless council tax thieving thick bods.


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