“No Benefits” letting bans ruled unlawful by the court

A judge has ruled that landlords cannot reject tenancy applications because the applicant is on Housing Benefit (or Universal Credit). Why is this decision so important? Well, in January 2020 a YouGov survey for the charity Shelter found that an astonishing 63% of private landlords either operate an outright ban on letting to tenants receiving housing benefit or say they prefer not to let to this group. The judge’s ruling of indirect discrimination is due to the fact that women and those with disabilities are disproportionately more likely to be in receipt of housing benefit and therefore disproportionately affected by “No DSS” or “No benefit claimants” bans.

It should be noted here that the DSS has not existed for several years and that over half of families in the UK receive some type of state support, such as State Pension or Child Benefit ; but this is being picky. The discrimination in this case is undoubtedly aimed at Housing Benefit recipients or Universal Credit claimants receiving the housing element.

The legal team at Shelter always believed the ban was unlawful, but previous cases had always been settled out of court, before a judge could make a formal ruling … until now.

The July case involved a single working mother of two who lived with a disability. She had rented privately for 10 years and always paid her rent in full and on time. When her landlord served her with a Section 21 ‘no-fault’ eviction notice, she needed to find a new home at short notice.

Section 21 of the Housing Act 1988 enables private landlords to repossess their properties from assured shorthold tenants without having to establish fault on the part of the tenant. It is sometimes referred to as the ‘no-fault’ ground for eviction. In September 2019 the government published a consultation paper to abolish Section 21 evictions. But I digress.

In this case, the tenant found another suitable, affordable property and applied to rent it, but the letting agents refused to consider her application – explaining that ‘for years’ they had ‘a policy of not accepting housing benefit tenants’ despite the fact that she had good references from former landlords, was able to pay a deposit and up to six months’ rent in advance  and even had a guarantor.

As a result, the family were left homeless and turned to Shelter for help.  

District Judge Victoria Mark ruled that landlords and letting agents who reject tenancy applications because the applicant is in receipt of housing benefit were “unlawfully discriminating on the grounds of sex and disability” and therefore contrary to sections 19 and 29 of the Equality Act 2010.

In practice the ruling will probably just drive the prejudice underground and other objections or excuses will be found to avoid renting to allegedly sub-prime tenants.