The Renters Reform Bill proposes significant changes to the private rental sector. The bill aims to make the rental market fairer for tenants in the UK and has introduced a number of new provisions to achieve this. A key change being, the abolishment of section 21 notices. However, there are also other key changes being introduced such as the discontinuance of the blanket ban on benefits.
Problem
For years both Landlords and Letting Agents have implemented ‘No DSS’ or ‘No benefits’ policies in which agents would refuse to accept applicants in receipt of benefits. Previously, there was no direct law preventing Landlords from doing so. Therefore, it is commonplace in the private rental sector due to prohibitions from mortgage lenders, difficulty reconciling benefit payments with rental demands and higher premiums from insurance providers.
However, such refusals have now been ruled as unlawful discrimination by the courts. The courts ruled that these ‘blanket bans’ on benefits go against the Equality Act. They discriminate against women, the disabled and vulnerable people and are making it harder for them to rent.
This court ruling did not seem to have much impact, with many landlords still listing their properties as ‘No DDS’ despite it being considered discriminative. The Renters Reform Bill is now taking this ruling one step further by making it illegal to have a blanket ban on renting to those in receipt of benefits. If this new law is ignored, landlords could face some serious consequences.
Impact
This development in the law is likely to be very daunting for landlords across the UK. They will have less control over who is residing in their property. In an attempt to reduce concern, the government have set out several ways in which they will assist Landlords, including:
- Supporting Landlords in making informed decisions on tenants’ credentials, rather than relying on blanket bans.
- Working with insurance providers to address concerns about policies for landlords renting to tenants receiving benefits.
- Exploring improvements to welfare support information and ensuring those who cannot manage their rental payments can arrange to have their housing payments made directly to their landlord.
- Boosting awareness of the local services available to those who are living on a low wage or receiving benefits.
Action
The above provisions may ease landlord’s concerns about letting to tenants receiving benefits. However, it should not replace the necessary checks done on all tenants. These must be done before the decision is made to let out your property.
Robust referencing reports make all the difference. They ensure you know exactly who is residing in your property. It also proves their ability to pay, and provides useful information should you need to pursue your tenant for rent arrears or costs associated with damage to the property at a later date. At Woodstock we assist thousands of landlords to recover money owed to them and a detailed referencing report can often prove a very useful tool.
The reality is that in a competitive private rental sector with reducing stock and rising rents it will be very difficult for tenants to determine that their reliance on benefits was the sole reason they were not let a property. However the team at Woodstock strongly recommend that agents and landlords document their marketing and shortlisting process to avoid any criticism that they are acting in a discriminatory manner or are in breach of the new rules – when they come in.
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