Two easy ways to avoid a £13,000 bill

Two easy ways to avoid a £13,000 bill

Guest blog by Helena McAleer, Landlord

So, your letting agent told you renting your property to people on DSS is a bad idea?

If your letting agent has advised you against letting your property to a claimant of housing benefit, then they are wrong. This is discrimination and it’s illegal. In court, the responsibility falls at the feet of the landlord, who, as recent cases show, could be on the receiving end of an eye-watering £13,000 bill.

I’d encourage you to check that your letting agent isn’t discriminating in your name – click here to check with your agent.

I’m what you call a reluctant landlord. After moving from Belfast to London for work, I was forced to let my house out when I lost a lot of money on it in the recession which left me in a very difficult and extremely stressful position. It was my home for many years and I was very precious about it, plus it was not for me to make money on, so renting it out to anyone was a big deal for me.

The letting agents I spoke to at the time recommended that I don’t accept anyone on DSS as it was very risky, they had a bad reputation, couldn’t be trusted. The list of reasons cited was endless. It turns out my experience was not a one-off either. 1 in 5 of all landlords with a ‘no DSS’ policy say it is because of letting agent advice.[1]

However – if I had turned down anyone on the grounds of them receiving housing benefit, I could have had legal action brought against me and been ordered to pay thousands of pounds in compensation. Emma and Amanda are two housing benefit claimants who recently brought legal cases against the landlords and letting agents that refused them a place to live on these grounds.

The cost of Amanda’s settlement totaled £13,000…

When letting my house for the first two times, I followed my agent’s advice to take on ‘working tenants’ and ‘professional couples’ in the hope that it would safeguard my income, but those tenancies ended up being short-lived, time consuming and difficult. Every time there’s an issue the money is coming from my pocket, so these things matter to me. Over time, the stress builds and builds.

For my current tenant, I ignored the advice of my agents; she’s reliant on housing and other benefits and it’s been the longest, most secure tenancy I’ve had. Given the advice I’d been given by letting agents, it felt like a risk, but I thought it couldn’t be worse than anything I had experienced already.

Now, 3 years later, I could not be more grateful to her as a tenant. She looks after the house and has truly made it her home. Things happen from time to time as they always do but nothing that we can’t manage together.

The thought that things could have turned out very differently and that, if I had turned down a potential tenant on the grounds that they receive housing benefit, I could now be facing a bill for thousands of pounds is really concerning.

How to avoid being fined £1,000s for discrimination:

Well it’s actually really simple – consider every tenant on a case by case basis and avoid any blanket policies which prevent certain people applying to your property.

The two steps you need to take are:

Advertise lawfully

Having ‘No DSS’ and ‘Professionals only’ in your advert can discourage people on benefits from even registering an interest in properties, which means you cannot consider their individual circumstances. Using this kind of discriminatory language puts both letting agents and landlords at risk of legal action.

Consider individual circumstances 

Do not reject an application from a tenant simply because they receive benefits. You must consider the tenant’s full circumstances to understand the merits of their application.  

For example, you may feel concerned if a tenant’s benefits are paid in arrears. But by looking at their circumstances, you may find they can pay the rent in advance with savings (or other means) until their benefit payments start.  

The easiest way to make sure you’re not at risk of legal action is to check with your letting agent that your properties are not advertised as ‘No DSS’ – click here to email them now.


[1] Nearly one in five (19%) of landlords who bar or prefer not to let to people on benefits say that one of the reasons for this is ‘Because my letting agent advised against it’, the second most commonly cited of 11 reasons. Among landlords who use a letting agent, this rises to 29%, the top reason.

Other landlords cite the terms and conditions in their mortgage as set by their mortgage lender as a reason for not letting to people on benefits. Most lenders have removed this requirement from their mortgages. If you are not sure, check with your mortgage lender.

Ref: YouGov survey of 1009 private landlords in England, online, weighted, Dec-Jan 2020.