An estimated 50 percent of landlords have a policy of not letting to tenants in receipt of Housing Benefit. We’ve seen the ads in the paper – the listings that say, blatantly, no DSS – and it’s generally accepted. In many cases these ads are unnecessarily restrictive. There are vast numbers of outstanding, considerate tenants who need financial support, and such policies don’t help those on low incomes to get a decent place to live. These restrictions cause huge issues in our bigger cities, but are they cases of discrimination?

Technically, no. To be discriminatory, under the Equality Act of 2010, the reason for refusing a tenancy would have to be on the grounds of age, disability, gender reassignment, race, religion or belief, sex, sexual orientation, marriage and civil partnership, and pregnancy and maternity. It’s still okay to refuse someone because they have an income that doesn’t reach your required level.

But this is where it gets tricky. What if their income is low because of one of the Equality Act’s protected characteristics? In a recent case, a woman claimed redress against a letting agent who had refused a tenancy because she was a Housing Benefit recipient. Her argument was that she received the benefit because of her single parent status and that women were far more likely than men to be in such a role. Hence, it wasn’t an issue of income but rather one of gender.

The letting agent settled the compensation claim out of court, but if the decision had been made in the courts, then a legal precedent would have been set. Landlords and agents everywhere would be faced with trying to decide which of their policies could possibly be construed as discriminatory.

Financial risk and reward

This puts the industry in something of a pickle because it is set up to permit policies that ban benefit recipients. Major providers of buy-to-let mortgages have clauses that restrict letting to tenants on benefits. Insurers increase their premiums or refuse cover that could protect a landlord’s income. I don’t believe that these financial institutions are being discriminatory – I believe they are reflecting a measurable increase in risk, and it’s this increase in risk that we must address if we are to tackle this problem.

Previously, Housing Benefit could be paid directly to landlords and rental income could be assured. The introduction of Universal Credit, however, puts the tenant in control of their benefits. Landlords are left with two options:

1. To accept a tenant with a guarantor

or

2. Seek the tenant’s consent for an alternative payment arrangement. (Note that consent is not required if a tenant is already two months in arrears.)

There’s also the issue of council bureaucracy – which landlords want to be faced with the extra admin and having to deal with housing officers unable – or unwilling – to see that landlords as well as tenants have rights?

Landlords will only stop using their ‘No DSS’ policies when there is no detriment to them doing so, and right now, there can be. Convoluted arguments which assert that a logical decision based on financial risk and reward is actually motivated by prejudice against someone’s gender – or any other protected characteristic – won’t help. A grown-up discussion about the real issues might.

There is currently a thin dividing line between an acceptable policy and discrimination, and some are trying to blur that line. We all need to be very sure which side of the line our policies are on.