It is a well-known fact that tenants on benefits find it more difficult to secure a rental property than those who are not. Often the accusing finger is pointed at the landlord.

However, there are significant underlying factors that make it difficult for landlords to rent their properties to those on benefits. It’s not necessarily a matter of choice for landlords but more often stipulations from banks, insurance companies and council operations that affect their tenant selection.

Mortgage Distributor 3mc recently conducted market research for The Residential Landlords Association (RLA). The findings showed that two-thirds of the largest buy to let lenders (almost 90% of the market) prohibit landlords renting to tenants who receive benefits. Some of these key lenders included NatWest, TSB and Virgin.


Director of 3mc, Doug Hall stated: “Some of the reasons given for not lending to those renting to claimants include concern about rent not being paid and historic data which calculates the risk of tenants falling into arrears or facing repossession.”

Discrimination driven by the banking system – not landlords

Alan Ward, RLA’s chairman, made a key point in defence of landlords: “Discrimination against tenants receiving benefits is not driven by landlords but by the banking system. If the private rented sector is to house more people then barriers to landlords making fairer decisions over who they must rent to must be removed.”

“We need a system which gives tenants, landlords and lenders the confidence they need that rent will be paid on time and in full. All political parties need to trust tenants to know what is best for them and give them the opportunity to choose, without having to get into arrears, to have Universal Credit and benefit payments made directly to their landlord.”


Local authority systems

The way in which benefits are paid appear to be an additional concern for landlords to contend with. They are paid in arrears directly to the tenant, and often as 4 weekly arrangements rather than monthly cycles which can cause cash flow difficulties for the landlord.


A Glasgow landlord stated further concerns with the system: “Various changes over the years to ways in which benefits are paid have made me reticent renting to people receiving such payments because I feel there is too much financial risk for me as a landlord.”

Conditions of some landlord insurances add to the complexity when selecting long term tenants. Certain providers feel tenants who receive benefits are a higher risk and therefore make their premiums more costly if a landlord intends to rent to all income groups. Some landlord insurance companies simply do not allow the landlord to let to tenants on benefits.

It appears that something needs to change, particularly in a time where so many people are struggling to find a home. Systems have been put in place to help those receiving benefits, however these very systems designed to help actually appear to be hindering them in the long run.

3 comments on ““No DSS” – Whose Choice is it Anyway: Banks or Landlord’s?

  1. There is also another element to this driven by the Benefits system. I got stung letting to a DSS tenant. When we offered the Tenancy to a DSS applicant, we stipulated that the benefits (equivalent to a months rent) when received must be directly transferred into our account from the Benefits Agency. This seemed the logical thing to do to ensure we would receive the rent each month. However, 9 months into the tenancy we received a demand from the Benefits agency. The Agency had been overpaying benefits to the tenant, (or the tenant had been falsely claiming benefits) and because the money was going directly into our account we were held liable to return the money not the Tenant!! Landlords should be aware of this. Landlords overall have very little protection now. Tenants have all the rights and the Government seems to overlook that rental income is a livelihood to many Landlords. We have mortgages to pay. The Lettings business should not be considered a charity, if a business is no longer viable then Landlords will sell up = shortage in rental properties = increased demand = increase rent. Is this what Shelter Scotland wants?

  2. This is normal scaremongering from councils during recovery of overpayments. If the Landlord has no knowledge of the misrepresentation that caused the overpayment, then they are not liable for the payback.

    DWP HB Overpayment Guide 2015 states:
    4.164 Following the April 2006 amendments to the HB Regs, LAs must recover an overpayment caused by a misrepresentation or failure to disclose information from the person or persons who actually misrepresented or failed to disclose that information.

    Therefore the tenant who has a change in circumstances and fails to inform DWP is liable for the overpayment, not the Landlord, even although they received the payment.

    Anytime I am requested to refund an overpayment I ask them to provide explicit evidence that the overpayment came about due to misrepresentation from me not informing them of required information. Never had to pay yet.

    The Landlord is liable if the tenant moves out, and the Landlord fails to inform DWP and continues to receive the tenants benefit.

    Unfortuneately the admin issuing overpayment requests don’t realise their own rules. Only when challenged, it goes to a higher level, who then normally withdraw the claim from the Landlord.

    Very few Landlords realise this, DWP know this and realise that the recovery will be successful from the Landlord.

  3. Iam disabled and therefore longterm on benifits as iam totally unfit for work so through no fault of my own am on benefits. So I don’t have a choice in this id work full time if I was able and I feel discriminated against in private renting sector and I think that should be addressed because ppl in my situation haven’t choosen this path it just how it is and the cards we are dealt. Not like am sitting at home scamming the system. I think if a person is disabled whatever the reason should be seen differently from a person just out of work (umemployed)and on benefits as these are totally different circumstances and these ppl can find a job where is. U employable due to illness all of which are degenerative (getting worse not gonna ever get better ) x

Comments are closed.