Did you ever hear the expression, “you can’t do right for doing wrong?” or “between a rock and a hard place?”
That’s where private landlords are right now – between the devil and the deep blue sea, torn between the wroth of the Equality Act, and the justified ire of mortgage companies.
We covered the case of Rosie Keogh all the way back in February, when she won compensation from a letting agent for discontinuing her application when they discovered she was on housing benefits.
The rationale was simple. Around 60% of housing benefit claimants are female, rising to 95% for single parent households. Therefore to discriminate against housing benefit claimants is to discriminate against women.
Does that make sense to you?
The case was settled out of court for the princely sum of £2,000, meaning that no legal precedent was set. As far as we’re aware there have been no subsequent legal actions which would actually set this into case law.
But that doesn’t mean it’s over. The National Housing Federation and homeless charity, Shelter have been investigating online adverts to find out what proportion of the PRS refuses to let to tenants on benefits.
The results are surprising. Out of 86,000 adverts, they discovered that one in 10 explicitly stated “No DSS.” A smaller survey in 2017 found that 43% of landlords had a complete ban on claimants, while a further 18% just preferred not to let to them.
So why the drop? It could be that landlords are simply being more subtle about their policies, and not explicitly stating their preference for tenants who can afford the rent by themselves. On the other hand, it could be that their letting policies have actually changed due to the threat of legal action under the Equalities Act.
We simply don’t know.
The Equalities Act is the rock. The hard place is the terms and conditions set out by the overwhelming majority of mortgage companies, which spell out in no uncertain terms that letting to tenants on benefits is a breach of mortgage conditions. We covered this earlier in November, with the story of a Belfast landlord who was given the choice of turfing out her elderly tenant or being forced to close her mortgage.
The majority of private landlords are stuck between these two immovable objects, and there’s very little they can do about it.
It’s not going to be long before another disgruntled would-be tenant sues, wins, and sets a legal precedent – especially with bodies such as Shelter pushing the issue onto the front page of the BBC again. And when that happens, millions of landlords will find themselves forced to breach their mortgage terms and conditions.
What happens then?
The only possible outcome from this impossible situation is that only individuals and companies with ready cash will be landlords. They don’t have mortgage Ts and Cs to breach, and can let to DSS claimants without the risk of having their finance withdrawn.
Most landlords don’t have that kind of cash on hand.