United Kingdom
July 20, 2023
PayProp Rent Report

New law could end rental bans on children and benefits

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Landlords could soon be banned from barring children and people on benefits from their properties – but with rental properties in short supply, it may not have much of an effect.

Bans on families may sometimes be justified – for example, a small property where renting to a family would cause statutory overcrowding. But the government is now looking into tightening up the rules on when and how landlords and agents can impose them.

The UK and Scottish governments are working on a joint law preventing blanket bans that would apply in both countries. According to Michael Gove, Secretary of State for Levelling Up, Housing and Communities, it would “send a clear message to providers”.

Having children can reduce the number of properties available to a tenant. A recent BBC investigation of property advertisements found that 24% of OpenRent listings exclude families from renting the property. Meanwhile, on Zoopla, less than 1% of listings barred families. For their part, property platforms such as Zoopla and Rightmove ban agents from including “no DSS” in adverts, while OpenRent allows landlords to list properties as “Accept DSS Income”.

What would a new law mean for renters?

A new law may not actually change much. Letting agents and landlords have already lost court cases for barring tenants on benefits from their properties. The Property Ombudsman, one of England’s two redress schemes, has also told its letting agent members that they can’t include blanket bans on children in property listings without good reason.

But despite these rulings, finding a property to rent can still be tough for tenants on benefits. According to the Institute for Fiscal Studies, Local Housing Allowance (LHA) covers just 5% of the advertised rents on Zoopla – down from 23% when rates were frozen in 2020. That leaves the 38% of tenants who receive housing benefits competing for a very small pool of properties.

Meanwhile, high demand for properties means that landlords and agents can pick the least risky tenants from a large pool of applicants.

A spokesman for the Scottish government said that LHA rates should be reviewed as part of the policy, which could improve the outlook for claimants if it happens. But the UK government has said that it plans to continue the freeze.

Other national headlines

Landlord removed from register succeeds in challenge – Scottish Housing News

Expectations for housing market in Wales deteriorate – Business News Wales

NI housing market: number of sales fall by almost one fifth – BBC

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