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"No DSS" - Not Legal But Justified?

No-DSS

The BBC published research last month showing that although specifying 'No DSS' is illegal, landlords are still reluctant to take on tenants who are wholly supported by benefits. (See the report here). Unfortunately, like most commentators in this space – the BBC are asking the wrong question.

PDPLA Vice Chair, Alwin Oliver did try to balance the debate when interviewed on BBC South Today (broadcast 2nd Sept - members can see a summary of the discussion here) but as is always the case in these situations, the snippet that was broadcast largely missed the point and failed to ask why landlords often avoid those on benefits.

So What Is The Problem?

Operating in a market where supply has always been at a premium and letting good standard properties has never been a problem – the average landlord or agent is faced with multiple applicants for each property and has to choose which is most likely to be reliable, to pay the rent and to look after the property.

The mismatch between we landlords and the general public, the media and many other organisations is that we see renting as a business or, for some, an investment and our primary objective is to protect our investment and ideally to make a reasonable return – against that backdrop, there are often too many reasons why we say no to the applicant on benefits and yes to the one who is not or perhaps has a good reliable job.

Fundamental to this is comprehensive referencing – if someone has a bad credit history, county court judgements or issues with previous landlords they are not going to be offered the property. Given that until recently, 54% of tenants receiving Universal Credit were in rent arrears (frequently through no fault of their own), the fluctuating levels of benefit income with the current system and the inability of many landlords to consider tenants on benefits because of restrictions placed on them by their insurance or mortgage providers, plus the extra fees landlords face if they try to hedge the risk associated with tenants who have failed credit checks, it is not surprising that the vast majority are reluctant – faced with 2 identical tenants, one of whom is currently unemployed, to opt for the unemployed one.  (The risk can be reduced by taking out insurance but this is only available for tenants that pass the credit checks and other criteria specified by the insurance company, so in reality, this type of insurance rarely helps when tenants are on benefits).

In a Covid-19 world, this may all change and someone with no job to lose may be more reliable than someone currently employed but….But we will see.

In the interim, instead of constantly asking, "Do you let to tenants on benefits?" and then tutting disdainfully when the poor landlord answers negatively, intelligent journalists need to dig deeper and ask, "Why is it that the risk for landlords is so high, if they let to tenants on benefits and what needs to be done to help the landlord overcome them?"

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