How can we make sure the Renters Reform Bill ends income discrimination for good?
Published: by Jenny Lamb
The Renters Reform Bill has been widely lauded as a once-in-a-generation opportunity to rebalance the scales between landlords and renters, and a strong first step towards a fairer system for all. We’re at a formative stage in the bill’s life, where opportunities to influence its development are open and campaigning for specific changes can have a truly meaningful impact on the future of renting.
Scrapping section 21 evictions will give renters more security in their homes which, in turn, empowers them to challenge their landlord if they are not receiving the service they pay for and are entitled to. But what about the challenges people face even before they have secured a home? For many, finding a place to rent can be fraught with unnecessary complications and barriers, and the cost of living crisis has only made this worse. However, the government can change this with a robust Renters Reform Bill.
This video highlights some of the injustices renters face, by imagining what a world would look like if discriminatory barriers were placed in front of people at every single point in life.
These scenarios would never happen. So why do they happen in renting?
If you’re an MP watching this, here’s our briefing on how the Renters Reform Bill can tackle income discrimination.
If not, support our campaign today to call on the government to end income and family discrimination in renting once and for all.
What is income discrimination?
While people struggle to afford even the most basic necessities, some landlords and letting agents are seeing the crisis as an opportunity to exclude renters on the lower end of the income scale in order to protect their interests and maximise their income. Although the latest government statistics show that the number of homes in the private rented sector actually increased by 11,000 between March 2021 and March 2022, high rents are forcing more and more people to compete for the dwindling number of properties that are still relatively affordable.
In our services, we are seeing landlords impose stringent affordability checks and throw up additional barriers that keep people out of homes they could otherwise afford. Households whose income is dependent on benefits experience the sharpest end of this problem.
Around 1.8 million households who rent privately receive housing benefit to cover some of their rent. At the same time, 59% of landlords have said they either do not – or would prefer not to – rent to tenants who receive benefits. This makes it almost impossible to secure a home if your household income includes benefits.
What will the Renters Reform Bill do about income discrimination?
The Renters Reform Bill has committed to making blanket bans against people who receive benefits directly illegal. Several legal cases have already set a precedent that blanket bans are discriminatory, and therefore illegal, as they have a disproportionate impact on certain marginalised groups, such as women, Black and Bangladeshi households, and disabled people. Making blanket bans directly illegal will mean that it will no longer be necessary to belong to a protected group in order to challenge discrimination.
What else can the bill do to tackle discrimination?
Making blanket bans illegal is a great first step, but there are more opportunities to turn the bill into a genuine vehicle for change. As well as blanket bans, there are other strategies that landlords and agents employ on a more informal basis to make it more difficult for low-income households to secure accommodation. The two most prolific tactics are asking for multiple months’ rent in advance, and requesting that the tenant appoints a guarantor to accept responsibility for any missed rental payments.
Rent in advance
A promise was made in the government’s White Paper to investigate how requests for multiple months’ rent in advance impacts prospective tenants and to give the government the power to implement new rules in the future. In 2021, 65% of renters we spoke to reported being asked for some level of rent in advance, and we’ve seen many cases of very large amounts being requested. In some cases, landlords are insisting on as much as 12 months’ rent upfront.
To prevent these requests from blocking people out of the rental market, we are asking the government to cap the amount of rent in advance that landlords and agents can request to two months in the Renters Reform Bill to give everyone a fair chance to secure a home.
Guarantors
To guard against the risk of missed rental payments, landlords and agents sometimes ask a tenant to appoint a guarantor to assume liability for their rent if they fail to pay. Few people from low-income households will have someone who can afford to take that risk, especially when they themselves may be renting. Anecdotally, we understand that these requests are becoming commonplace, (particularly for those who receive benefits), and with the added caveats that the guarantor must meet a certain income threshold or own their own home, those without a support network are pushed out of the market. Singling out low-income households and benefits recipients in this way is a form of classism, and there is an argument that this already falls foul of the Equality Act 2010 in much the same way as ‘No DSS’ rules.
To relieve renters and their friends and families of this pressure, we are asking the government to prohibit the use of guarantors as a prerequisite for renting and to encourage landlords to take advantage of widely available insurance products as an alternative precautionary measure.
Income discrimination can take many forms and wears many disguises
It is crucial that, in attempting to tackle the issue, the government carefully considers its various forms and expressions so that avenues aren’t left open to exploitation. The government also needs to recognise that, without robust enforcement mechanisms and better access to justice, any rights given to renters in the Renters Reform Bill won’t have the intended impact.
Make sure the Renters Reform Bill stamps out income and family discrimination in the private rented sector, and put fairness, rather than finances, at the heart of renting.