MPs blast banks for discriminating against tenants on benefits

The Guardian - 20 Nov 2018

MPs have slammed banks for “discriminating” against tenants on housing benefit and suggested the government may need to ban them from operating “no DSS” policies.

NatWest was criticised in October after it emerged that the bank prohibited many of its buy-to-let landlord borrowers from having tenants on housing benefit. The case, involving landlord Helena McAleer and her tenant, a vulnerable older woman, came to national prominence after the Guardian published an article headlined: “NatWest, is it right to evict a woman on housing benefit?”

The Commons work and pensions committee has intervened, saying the government must address the “housing blacklist” created by mortgage lenders’ “no DSS” policies.

McAleer’s buy-to-let mortgage is on a house in Belfast and her tenant has always paid the £400-a-month rent on time for more than two years.

When McAleer approached her mortgage lender, NatWest, for some additional borrowing, she was surprised to be told that this would only be possible if she kicked out her tenant.

NatWest’s mortgage policy for landlords with fewer than 10 properties includes a restriction on letting to tenants in receipt of housing benefit. There are about 4.2 million housing benefit claimants in Britain. NatWest was keen to state that it was not throwing the tenant out on the streets, but its correspondence with McAleer made clear that “the options available to you are to seek an alternative tenant or move your mortgage to another lender”.

McAleer, who lives in London, decided to move her mortgage and organised a petition calling on the government “to stop banks discriminating against welfare recipients”.

The work and pensions committee has published correspondence relating to the case and said it was “deeply concerned” about the extent to which mortgage providers were preventing landlords from renting to benefit claimants.

Frank Field, who chairs the committee, said: “Allowing banks to operate a ‘no DSS’ policy is a return to the wicked old days of housing discrimination, with claimants effectively blacklisted for housing and at risk of being senselessly evicted for no greater crime than receiving housing benefit.

“NatWest is now taking a look at its policy and other mortgage lenders will no doubt follow suit. If the change we need to protect people is not forthcoming voluntarily, we may need to look to regulation.”

NatWest is part of the state-controlled Royal Bank of Scotland, whose chief executive, Ross McEwan, said in a letter to the committee that he was “extremely disappointed” with the way the case was handled by the bank. “We are now in the process of conducting a review of our buy-to-let policies,” he said, but pointed out that the bank’s policy in this area was “in line with a number of other lenders in the buy-to-let market”.

McAleer said she welcomed the committee’s intervention and would like to see the issue debated in parliament.

Rupert Jones, The Guardian