Housing benefit - curse or cure?
- AuthorAndrew Turner
A survey carried out by Shelter in 2017 found that 43% of private landlords applied a policy of refusing to accept tenants in receipt of housing benefit. This apparent discrimination has provoked a considerable amount of public outrage and media attention.
It has been pointed out that refusing to accept tenants in receipt of housing benefit results in indirect discrimination against women. 60% of adults receiving housing benefit are women. 95% of single parent housing benefit claimants are female.
On the face of it, the discriminatory effect of this reluctance to let properties to housing benefit tenants is clear, and the injustice and hardship that this creates is equally clear.
However, amidst the justifiable outrage, there are other relevant (but unpopular) factors that deserve some consideration.
Landlords will say is that it is entirely reasonable to assess the prospects of a tenant falling into arrears and to carry out a full risk assessment. Where a tenant is proposing to pay the rent through a combination of housing benefit and private funding, the risk of default is arguably higher than where the rent is being paid in full via housing benefit payments. A landlord will inevitably and understandably be cautious about the ability of a tenant to afford to pay the privately funded element of the rent.
The landlord’s risk assessment will be even more thorough in cases where a landlord has had a difficult experience with tenants in the past and has perhaps had to go through a possession procedure to obtain a possession order and evict a tenant. With repossession actions potentially running to thousands of pounds, on top of what may be a substantial arrears debt, landlords can be stung severely if a tenant defaults.
There are other factors that landlords point to when explaining why tenants in receipt of housing benefit have not been at the top of their lists in the past. One factor is that housing benefit is generally paid in arrears. Many landlords will naturally prefer to select a tenant who can pay the rent in advance when it is due rather than opt for a tenant who is always going to be a month in arrears.
Should landlords be more accommodating and supportive of tenants in receipt of benefits? It is certainly hard to justify the blanket bans that some landlords have adopted. But should landlords be cutting tenants some financial slack and putting themselves at financial risk out of a sense of moral duty to those in need? The case for this is equally hard to justify if you are talking about private landlords.
In short, landlords can forget trying to justify a blanket ban on housing benefit tenants. This clearly has a discriminatory and wholly unacceptable consequence. But at the same time, landlords are fully entitled to carry out a financial assessment of a potential tenant’s ability to pay the proposed rent and to fully assess the risk of that tenant falling into arrears. This is basic financial self-preservation. When a tenant defaults, it often results in the landlord being thrown into a financial hole, often with no redress from the defaulting tenant who has gone AWOL. If a landlord’s rigorous but fair risk assessment results in some housing benefit tenants being turned down, that should not automatically provoke cries of discrimination.