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Why would landlords want rent in arrears when they can get paid up front?

Date Added 22/08/2018

Thousands of private landlords across the country understandably reject housing benefit claimants despite accusations that they are discriminating against those on lower incomes.

The National Housing Federation (NHF) has joined forces with Shelter to launch a new campaign to end what it sees as the discriminatory practice of ‘no DSS’ in the private rented sector.

People receiving benefits are often locked out of the private rented sector and seen to be openly discriminated against by private landlords, which the NHF and Shelter believe is wrong.

But while there is a case to be made that those private landlords should not be allowed to reject people on DSS, the reality is that they are less attractive tenants compared to private tenants that are not receiving benefits.

Refusing DSS tenants may be perceived as discrimination, but that is simply not the case according to the Association of Residential Letting Agents (ARLA Propertymark).

The trade origination points out that there is a “systemic problem” with how housing benefit works.

David Cox, chief executive, ARLA Propertymark, said: “Rents [from private tenants] are paid in advance, whereas housing benefit is paid in arrears, and therefore with such a shortage of rental accommodation, landlords and agents will naturally choose a tenant who can pay the rent when it is due, rather than a tenant who is always a month in arrears.”

ARLA Propertymark has repeatedly called on the government to resolve this problem. But its calls “have fallen on deaf ears”, according to Cox.

He added: “To make the situation worse, many lenders also have a clause in their buy-to-let mortgage agreements which prevent landlords from letting to housing benefit tenants.

“This situation does not exist because of landlords or letting agents, it is a systemic problem caused by government and the banks.”


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