NatWest has bowed to growing industry pressure by lifting restrictions on buy-to-let landlords renting to tenants in receipt of housing benefit.
In October, NatWest's lending practices came under attack after the bank told one landlord that she would either have to evict her tenant of two years or take her mortgage business elsewhere, after a blanket ban by the bank on benefit claimants.
The bank’s own buy-to-let eligibility criteria noted: “We will not consider multiple tenancies, Homes of Multiple Occupancy, bedsits, DSS tenants or 'Related Person' tenancies.”
The landlord, Helena McAleer, who let out a home in Northern Ireland, refused to evict her tenant, a vulnerable older woman who always paid the £400-a-month rent on time for more than two years, after being denied a remortgage by NatWest and instead moved her loan to another provider. She launched a petition that has attracted more than 5,200 signatures supporting an end to such discrimination.
The Residential Landlords Association (RLA) has since raised serious concerns that the majority of buy-to-let lenders are preventing landlords renting property to some of the ‘most vulnerable in society’.
The RLA has been lobbying the government to tackle discrimination against benefit claimants by mortgage providers after research late last year by the landlords association found two-thirds - 66% - of lenders representing 90% of the buy-to-let market refuse a loan where a tenant is on housing benefit.
The Work and Pensions Committee has now written to a number of mortgage lenders about potential DSS discrimination clauses in their lending policies.
Ian McLaughlin, managing director of Home Buying & Ownership at NatWest, said: “I am pleased that we are introducing these changes and extending our policy to support smaller landlords in this segment of the market.
“We would like to thank Shelter and the Residential Landlord’s Association for their thoughtful and thorough contributions to the review, to help us better understand the market in this area and bring our policies in line with those in our commercial segment.”
Natwest has also extended the maximum length of time of assured shorthold tenancy from 12 to 36 months, which allows landlords to offer tenants the security of longer tenancies.
John Stewart, policy manager for the RLA, commented: “We warmly welcome today’s announcement from NatWest.
“Around 20% of all private sector tenants are in receipt of benefits and we need to do all we can to support them to find the homes they need.
“NatWest’s decision will make it easier for landlords to rent to benefit claimants, and agree long term tenancies where suitable. We urge other lenders to follow this lead.”
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The '' most vulnerable in society '' are also the riskiest tenants so are best left to councils and housing associations , a private landlord runs a business, not a charity .
Totally agree!!
If there was no difference in business risk with taking on DSS tenants then few LL would have any issues.
It is rare now for various reasons that the business case for DSS tenants can be made.
A lot of this is not of their own making.
It is just the system which effectively victimises tenants and LL alike.
It is generally easier to source tenants to pay market rents who DON'T need HB.
But so fraught is the HB issue that even just a small proportion of the rent that might be HB can be the devil to have paid.
UC is obviously a massive problem here.
Everyone keeps obsessing about direct payment as the answer to everything...............no it isn't as long as 'clawback' possibilities exist.
The most I would go with DSS tenants is to insist that a CU was used to pay the FULL contractual rent before any other payments were allowed.
But then all a tenant has to do is stop payments to the CU and if required a long eviction process occurs.
There are so many negative business issues with DSS tenants to just be too much hassle for LL to bother with.
Since I submitted a UC 47 in November I haven't received a penny!!
There is simply no way I would ever take on a DSS tenant at the beginning of a tenancy.
You can't do much about those tenants that go from paying rent from full wages to losing a job and requiring benefits.
You would need to use S8 or S21 to get rid of such tenants who could no longer afford the contractual rent.
Mine are double the LHA rate.
No way am I prepared to let for half of what I could earn from non-DSS tenants!!
I'm operating a business not a bloody housing charity!!
It is not my fault if Govt imposes a OBC.
This OBC can be defeated if the lazy gits of tenants went and did 16 hrs work per week.
But they refuse to even do that.
So why should LL subsidise the feckless!!??
I choose not to and am pilloried for having the temerity as a LL to only have tenants from whom I can charge higher rents!!
I'm only in the game to make money not be subsidised housing!!
We will have to come up with some other sort of phrase to put off all the DSS tenants contacting one.
No DSS is short and simple and gets the message across that the LL doesn't want your business.
There will always be some LL prepared to let to DSS tenants just it won't be me.
Nobody will ever force me to take on DSS tenants if I DON'T want them!
Perhaps we could state Only tenant applicants that receive less than £100 pm in HB need bother enquiring.
Most HB tenants receive more than this.
So at least the LL is not having a blanket No DSS offer
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