How long before the private rented sector faces a discrimination claim?


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A large percentage of tenants in the social housing sector are in receipt of housing related benefits to assist them with the payment of their rent.

However, in the private rented sector, the percentage of such tenants is lower as many private landlords and letting agents openly advertise they do not accept claimants who are in receipt of housing related benefits.

Thankfully, long gone are the days when it was all too common to see signs in the windows of landlords and letting agents saying "no blacks, no Irish, no dogs".  Although, increasingly, private landlords and letting agents advertise that they do not accept benefit claimants, pets or children.

With the demand for social housing substantially outweighing supply, many people have little alternative but to seek accommodation in the private rented sector. Often such people are working but are "just about managing" and receive some form of housing related benefit which contributes towards the payment of their rent. However, is it fair that they, along with those who use housing related benefits to pay the whole of their rent, should be prevented from accessing accommodation of their choosing? All too often as a result of this stance taken by private landlords and letting agents these individuals are restricted in the type of accommodation they have access to and as such it is unlikely to be too long before this type of refusal is challenged through the courts.

In the face of such challenge, private landlords are likely to argue they are not discriminating against any proportion of society as:

  1. they are free to let their properties to whomever they like; and
  2. the terms of their buy-to-let mortgage may prevent them from granting tenancies to claimants of housing related benefits. Presumably this is because lenders are concerned there is an increased risk of borrowers defaulting on their mortgages due to the way in which housing related benefits are paid (i.e. in arrears in respect of housing benefit or the risk of recipients of Universal Credit not passing the housing element of their benefit on to their landlords).

In the House of Commons briefing paper dated 1 November 2016 entitled "Can private landlords refuse to let to housing benefit claimants?" this very issue is considered in detail.

The refusal of private landlords to let their properties to housing benefit claimants does not amount to direct discrimination as income status is not a protected characteristic under the Equality Act 2010. However, there is an argument that such refusal may amount to 'indirect discrimination' due to a high proportion of housing benefit claimants being female and/or from an ethnic minority group. Indirect discrimination takes place where a policy, which itself may not be discriminatory, has the potential to impact disproportionately on people who are protected under the Equality Act 2010.  However, it should be noted that indirect discrimination may be lawful if it can be reasonably justified.

For landlords, such justification may be easier to argue where their mortgage provider has specified they cannot let a property subject to a mortgage to housing benefit claimants.  However, such an argument will clearly be much more difficult for a landlord with a property which is free of a mortgage. Further consideration should be given to what justification arguments may be open to letting agents.

Of course not all private landlords refuse to let to claimants who are in receipt of housing related benefits however, is it fair that the proportion of properties such claimants have to choose from is reduced or not in an area they would like to live as a result?

If a tenant were to win such a challenge in the courts it is likely to act as yet another deterrent, on top of the increasing amounts of regulation and financial penalties, faced by private landlords thinking of entering or remaining in the private rented sector.

 
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