Home Housing MP warns of a 'return to the wicked old days of housing...

MP warns of a ‘return to the wicked old days of housing discrimination’

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A senior MP has condemned banks and mortgage lenders for operating a “no DSS” policy that is effectively “blacklisting” housing benefit recipients and restricting their access to housing.

Frank Field MP, who chairs the commons Work and Pensions Select Committee (WPSC), has raised concerns about restrictions on mortgage lending to landlords whose tenants are in receipt of housing benefit and Universal Credit.

Natwest came under fire in October over the case of a landlord refused a re-mortgage because she was renting the property to a tenant in receipt of housing benefit.



The landlord, Helena McAleer, was told that she would either have to evict her tenant, a vulnerable elderly lady, or pay the early repayment charges and forego the mortgage as it was the bank’s policy not to allow rentals to a ‘DSS claimant’.

Natwest CEO Ross McEwan responded by expressing the bank’s “extreme disappointment” with the way the case was handled, claiming it “did not reflect the values of [the] organisation” and promising an immediate review its lending practices.

However, his letter to the WPSC also states that “in line with a number of other lenders …our mortgage policy for landlords with smaller property portfolios…includes a restriction on letting to tenants in receipt of housing benefit”.

“This reflects evidence that rental arrears are much greater in this segment of the market and we are satisfied that this restriction does not contravene equality legislation”, he added.

Photo Credit: Lars Plougmann/Flickr

There are 4.2 million people in receipt of housing benefit in the UK. Research by the Residential Landlords Association found that 66% of lenders, covering 90% of the buy-to-let market, have this kind of prohibition on lending.

The WPSC says it is deeply concerned about the extent to which mortgage providers are preventing landlords from renting to benefit claimants, especially considering the growing housing crisis.

Frank Field MP said: “The Government claims its welfare reforms are intended to drive employment, but allowing banks to operate a “no DSS” policy is a return to the wicked old days of housing discrimination, with claimants effectively blacklisted for housing and at risk of being senselessly evicted for no greater crime than receiving housing benefit.



“NatWest is now taking a look at its policy, and other mortgage lenders will no doubt follow suit. If the change we need to protect people is not forthcoming voluntarily, we may need to look to regulation.”

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