Why Landlords Should Take Tenants on BenefitsWritten By PropertyLoop February 17, 2021
How many times have you seen an advert for an apartment or house rental that states: “No DSS”? It feels pretty exclusive and, actually, it’s not really fair. The latter is a good point because the more it goes on, the more likely landlords are to get sued in today’s ‘inclusive’ UK society.
Should I Accept DSS Tenants?
By discriminating against DSS tenants you are also cutting out a huge proportion of your potential tenant market, after all. The English Housing Survey 2018-19 found that nearly two in every five households in the UK had someone living in a house who claimed some sort of benefits.
Since the 1980s, the government has been happy to supplement tenants in the private rented sector (PRS). It’s far less expensive to do this than to build council housing, after all. And certainly, it was the then PM Margaret Thatcher’s intention to get council tenants to buy their own homes. She persuaded them to do so with a much-reduced rate than what the property was worth on the open market.
The effects of that policy are still felt today with far too few council and social housing tenancies available. As a result, the PRS is used to supplement social housing. The government pays the rent and utilities in the form of Local Housing Allowance and Universal Credit.
At the same time, many parents claim Child Benefit and there are others who receive Disability benefit. The result is that it’s really not surprising the English Housing Survey found such a high number of households claiming benefit.
Reasons Landlords Should Let to Benefit Claimants
More Potential Tenants
As we already mentioned, you will get far more people interested in your property by not writing ‘No DSS’ on the advert.
Avoid Void Periods
With more people interested in your property, the less likely you are for it to lie empty while you try to fill it with new tenants.
Risk of Litigation
No-one wants sued in the court and viewed as a ‘discriminatory individual.’ This year a few letting agents have been fined under the Equality Act for discriminating against groups with characteristics (such as sex or disability) after they refused to even look at DSS tenants. And that’s just the cases that have gone to court. There have also been many out-of-court settlements adding up to thousands of pounds for individuals and companies. Of course, you can reject a tenant’s application if the DSS money they are receiving won’t cover the cost of your rent – but that should be the only stated reason.
Should I Accept DSS? Tenant
Just because someone is claiming benefits, doesn’t necessarily mean they will have rent arrears at some point. However, if this does concern you then there are several things you can do to make losing out less likely. You can, for instance:
Take Rent Upfront
This is five weeks rental upfront. For more expensive properties (in London, for instance) it can be up to six weeks rental money.
Add a Guarantor
Students are often asked for a guarantor and in many cases, this is a parent or another family member. You can do the same with a benefits tenant.
Perform Referencing Checks
Most landlords perform reference checks on potential tenants anyway – and it’s probably, in fact, more important to do so with a DSS tenant and their guarantor. That way you can reassure yourself that they haven’t been in rent arrears before and nor have they have a county court judgement against them. This can also give you a better idea of exactly who you are renting your buy-to-let property out to. And that certainly can’t be a bad thing.
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