Pay housing benefit direct to landlords to end discrimination, says RLA

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  • 03/05/2017
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Pay housing benefit direct to landlords to end discrimination, says RLA
The Residential Landlords Association is calling on politicians to change the current benefit system, claiming as things stand tenants on housing benefit are being unfairly discriminated against.

A study by Doug Hall (pictured) at packager 3MC, which advises the RLA, showed 66% of lenders (representing approximately 90% of the buy-to-let market) do not allow landlords to rent property to tenants receiving housing benefit, including TSB, Virgin and Natwest.

Hall contacted 58 lenders enquiring about a two-bedroomed flat where the tenants were in receipt of housing benefits. Two thirds said they wouldn’t allow properties to be rented out to those in receipt of housing benefit, 16% said they were prepared to consider it and 2% said they didn’t have criteria relating to housing benefits.

Just 17% said do allow properties to be rented out to those receiving housing benefit. These include Axis Bank, Fleet Mortgages, Landbay, Leeds Building Society, Paragon, Woolwich and TMW.

Both BM Solutions and Santander may consider applications where the tenant is in receipt of housing benefits but there needs to be an AST in place with the tenants directly.

But Alan Ward, chairman of the RLA says lenders would be more likely to change their stance on housing benefit tenants if rent support was paid directly to the landlord rather than to the tenants.

This research shows that the current benefits system is not working for tenants or landlords,” he says. “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 fair decisions over who they 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.”

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