Freezing out ‘No DSS’ landlords

Originally published on March 5 as a blog for Inside Housing.

The way that responsibility for housing is split between different government departments means that sometimes the left hand does not know what the right hand is doing.

The classic example of this came in parliament yesterday when even as MPs were approving another year of frozen working-age benefits, the housing secretary was making a written statement attacking landlords for refusing to let to tenants on housing benefit.

The vote means that the local housing allowance (LHA) will be frozen for the fourth year in succession and the benefit cap will stay stuck at the reduced rate of £20,000 (£23,000 in London).

The impact of that will fall directly in the ‘thousands of vulnerable people and families’ mentioned by James Brokenshire in his written statement and will be felt most by families with children and those living in the most expensive areas.

And it will come on top of the continuing impact of the transition to universal credit and all the problems with waiting times, delays in payment and supposed simplicity for tenants and landlords that it brings in its wake.

If it reinforces the sense of relief among social landlords that the government abandoned plans to cap housing benefit for social and supported housing at LHA rates, it means many social tenants face a freeze on the rest of their incomes despite rising prices.

But the freeze will give private landlords yet more reasons to think twice about letting homes to tenants on benefits.

And the move by the Department for Work and Pensions (DWP) comes at precisely the moment that ministers at the Ministry for Housing Communities and Local Government (MHCLG) give their backing to a campaign by Shelter on ‘No DSS’ adverts.

The reference to the DWP’s previous incarnation (the name changed in 2001) shows just how far the prejudice against benefit tenants dates back.

As James Brokenshire put it in his statement yesterday:

‘Our latest figures show that 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. As the prime minister recently stated, we have already started working with Shelter following their campaign raising awareness on so-called “No DSS” adverts.’

He added that ‘ministers will meet with mortgage providers, landlord associations, tenant groups and property websites to develop ways to stop the unfair exclusion of tenants in receipt of housing support. This will help us take steps to eradicate this practice and ensure people in receipt of housing support can access the homes they need’.

The statement follows the announcement last week by junior minister Heather Wheeler of £19.5m funding to be shared between 54 projects to help people facing homelessness access a private rented home.

She added that the meetings about industry representatives would be held with a view to stopping blanket exclusions in adverts altogether, a statement that was enough for The Sun to proclaim ‘Crackdown launched on snob landlords who refuse to let homes to people who claim housing benefits’.

So far, so good. As some mortgage landlords drop their restrictions on landlords with buy to let mortgages letting to tenants on benefits, the Residential Landlords Association is reminding its members that they should not impose blanket bans and more than 30,000 people have signed a Shelter petition urging five leading letting agents to stop discriminating against renters on housing benefit.

The campaign also backed by the National Housing Federation (NHF) argues that blanket ‘No DSS’ policies are unlawful under the 2010 Equality Act because they indirectly discriminate against women and people with disabilities.

And yet for all those positive signs of progress another year of the freeze will only accentuate the huge problems that already face tenants with growing shortfalls between their rent and a benefit that was originally meant to help them shop around with predictable consequences for levels of extreme poverty.

Even in the social sector there is evidence of housing associations turning down homeless households because of concerns about the impact of all the rest of the welfare cuts on their ability to pay the rent.

To put that extra £19.5m into perspective, at the 2016 Budget, the Treasury forecast that the four-year freeze would achieve an annual saving of £3.5bn by 2019/20.

But higher than expected inflation in the meantime means that the actual saving will be £4.4bn next year, with the 2019/20 freeze alone saving £1.5bn.

Meanwhile the House of Commons library says claimants will be left with benefits and tax credits in 2019/20 worth 6.1% less than if the freeze had not been introduced.

Work and pensions secretary Amber Rudd has already announced that the freeze will not be extended beyond 2020.

The chair of the all-party Work and Pensions Committee wrote to her yesterday urging her to ask the chancellor to end it a year early and she has been called to give evidence next week.

But the vote went through later with her junior minister emphasising instead increases to pensions and the minimum wage and cuts in income tax for the lowest earners.

In this morning’s Times, Rachel Sylvester reports that Ms Rudd wanted to end the freeze a year earlier but her appeals were rejected by the Treasury and No 10.

Housing’s left hand and right hand are of course both controlled by the Treasury’s strings but the confusion between them also provides a convenient cover for glaring inconsistencies in the effect of different policies.

Frozen benefits at a time when austerity is supposedly over ares just one example of many others, including cuts in investment in social housing that leave claimants reliant on private renting, the continuing impact of the end of the Supporting People ring fence even as the government makes homelessness prevention a policy and the Right to Rent policy declared unlawful in the High Court last week even as ministers criticise discriminatory landlords.

In the context of the billions saved on the freeze and the billions spent on no deal Brexit preparations announcements, those otherwise laudable ministerial promises of extra help for tenants on benefit look somewhere on the spectrum between warm words and outright hypocrisy.


10 Comments on “Freezing out ‘No DSS’ landlords”

  1. Kathy Miller says:

    They have made it impossible in many areas for a landlord to accept HB because the rates are far to low. Even in areas where it would work the anti continuous attacks on landlords via Shelter G rent condemning landlords wrongly of costing the public purse in billions in the form of housing benefit as drove many landlords out of thus market.
    The HB is given to the tenant not the landlord.
    The government as introduced section 24 which means many landlords will pay tax on a loss. Fines so out of proportion for the slightest error.
    Red tape and regs changing so much its like a whirlwind and no joined up thinking
    Trying to remove Section 21 so landlords have to rely on S8 that I’d not fit for purpose.
    The legal aid solicitors rubbing their hands with the introduction of Karen Bucks fitness of homes. So written that landlords will be found guilty when the tenants cause the problems.

    Social landlord’s now are really the PRS but with perks many are 20% below market rents so under cutting the PRS. S landlords don’t pay section 24 tax. This in my eyes is unfair competition.

    • julesbirch says:

      Agree LHA rates being way below rents in many areas is a big part of the problem. HB may be given to the tenant (though in some cases goes direct to the landlord) but it ends up with the landlord. Recent legal and tax changes are about redressing the balance of power between tenants and landlords and landlords and home owners – the table has been tilted in landlords’ favour since 1989 – but yes agree that if govt wants PRS to play role in housing poorest households it has to think about policy as a whole.

      • kathy miller says:

        How is that different to it ending up with the Social Landlord whos rents have been increasing while the PRS rents to income reduced from 35 to 32%. I bel S landlord is at 29%.

        I dont see how the powers have been tilted towards the landlord who pays tax and helps the economy . So many jobs have been created from the PRS

      • Gromit says:

        If it was ever tilted in the Landlords favour, it is now firmly not! Hence Landlords exiting the market reducing available properties by 1,000 per week.

  2. The Big Blue says:

    The people who say landlords should have to take DSS tenants are clearly people who have never let to them!

    • julesbirch says:

      And you wonder why landlords have a bad name? Or rather some landlords, since I would no more lump them all together than I would the 4.5 million households who get some housing benefit/LHA

      • Gromit says:

        Life’s not fair!
        Try getting reasonably priced car insurance as a 20yro no matter how good a driver you may be.

      • The Big Blue says:

        How many DSS tenants have you let to over the last 22 years and what percentage of those would you say have caused severe problems?

  3. Chris Daniel says:

    The Govt have created the problem and are ( successfully – because Tenants can’t see past their implications ) getting away with it.

    • Chris Daniel says:

      And U.C. has Multiplied problems 10 x fold. – and they wonder why Landlords OR Social Housing don’t want to rent to Tenants. Its because –
      1 ) Govt are not paying them enough to afford market rent, and
      2 ) The process for claiming the payments are so inefficient and riddled with problems.

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