Legal Case Reveals Rejecting Benefit Tenants Could be Breaking Law

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A recent legal case has revealed that buy to let investors who reject housing benefit claimants could be breaching the law.

Single mother Rosie Keogh recently won a legal case which saw her win compensation for sex discrimination from a letting agency. The agency had refused to consider her application to rent a property in the Kings Heath area of Birmingham after she told them that part of her rental payment would come via benefits. The case acts as a serious warning that landlords and letting agents who are refusing to let to claimants of housing benefit could be breaking equality laws.

A recent survey of 1,137 private landlords conducted for housing charity Shelter last year found that 43 per cent had imposed a full ban on letting to any tenants who claimed housing benefits. A further 18 professed to prefer not to let to such tenants if they could avoid it.

The implementation of Universal Credit and the rising number of rent arrears as a result has led to many landlords opting not to let to those on benefits.

Managing director of deposit free renting firm Dlighted, Ajay Jagota, condemned the decision by many landlords to avoid benefit claimant tenants.

He said: ‘We like to tell ourselves as an industry that the bad old days of ‘no dogs, no blacks, no Irish’ are behind us, but sadly it seems a significant number of rents are still being discriminated against in 2018 – and it doesn’t have to be that way. By the looks of things fewer and fewer landlords and letting agents are willing to rent to tenants on housing benefit tenants, most probably as a result of welfare reforms making them anxious about possible rent arrears. And they’re absolutely right that the old-fashioned tenancy deposit provided negligible protection against rent arrears and zero protection against legal costs – especially compared to the £600,000 of cover provided by deposit-free renting using deposit replacement insurance.’

Jagota argued that standard tenant vetting does not provide landlords with enough information about prospective tenants. He continued: ‘Landlords and letting agents might decided not to rent to a tenant with a lifetime track record of reliable renting because standard tenant vetting won’t let them see that.’