A recent undercover survey by the housing charity Shelter highlights the growing issue of landlord discrimination against tenants in receipt of housing benefit. While this is not illegal, Shelter considers that some instances may be unlawful under the Equality Act 2010. With this in mind, it is planning a court challenge. The challenge is likely to focus on women and the disabled as the two groups most likely to be in receipt of housing benefit.
No doubt Shelter’s decision to bring the challenge was buoyed by a ruling earlier this year that awarded £2,000 to a single mother who brought a successful sex discrimination claim against a letting agent. The agent had refused to accept her as a tenant on the grounds that she was a benefit claimant. She successfully argued that the policy disproportionately affected single women over single men as the latter were more likely to be in receipt of benefits and more likely to be a single parent. Although not a legally binding precedent, the case has stirred alarm as landlords wake up to the fact that this long-existing practice may, in fact, amount to unlawful sex discrimination.
Although an estimated 43% of private landlords refuse to rent to anyone in receipt of benefits, there may be some rationale to their decision. Many landlord insurance policies either do not cover tenants who receive benefits or charge considerably higher premiums. Mortgage policies may also have an effect. For these reasons, many landlords and lettings agents object to the “discrimination” label that is often applied to them and are as frustrated as their would-be tenants at their inability to rent to those on benefit.
The ongoing roll-out of universal credit further complicates the picture. Housing benefit is just one of six benefits being wrapped up into the new regime. Some landlords may refuse to rent to anyone in receipt of universal credit. This partly due to the reasons already identified above and partly due to a fear that a tenant may fall into arrears, perhaps as a consequence of a payment lag as they move from one system to the other. As a result, it is entirely possible that someone who does not receive housing benefit may experience problems finding a property in the private rental sector if, for example, their entitlement to child tax credit is moved to universal credit.
The very real concerns held by landlords mean that this is not purely an issue of discrimination. It is a matter that needs addressing by insurance companies, mortgage lenders and the Department for Work and Pensions. Failure to do so is not only a disservice to landlords, who risk being trapped between court rulings that they have acted unlawfully and, for example, an insurance company charging unsustainably high premiums for tenants on benefits, but also to tenants themselves.
Article provided by Manchester Solicitors Clifford Johnston and Co