Five UK letting agents have been found potentially breaking the law by “banning” tenants on housing benefit.

According to undercover researchers posing as prospective renters, one in ten of the 149 letting agents targeted had a branch policy to prohibit anyone claiming housing benefit – whether they could afford the rent or not. And nearly half said they had no suitable homes or willing landlords to take on a tenant on housing benefit.

“Once I mentioned housing benefit, she was abrupt and wanted to end the call. She was very dismissive and unhelpful,” said one of the investigators, from Mystery Shoppers Ltd.

“I felt like I was a second-class citizen and that he wanted to get off the phone to me as soon as he could,” said another.

The exposé by Shelter and the National Housing Federation reveals that Your Move, Haart, Fox & Sons, Dexters and Bridgfords have branches where the policy is not to accept housing benefit tenants.

Haart says some of its branches were “misinformed”, but it does not have a policy to refuse housing benefit tenants, and will ensure this is followed across the board. A Fox & Sons spokesperson also says “we certainly do not have a policy to discriminate against tenants in receipt of housing benefits”.

A Your Move letting agent says “we regularly handle applications from those in receipt of DSS benefits and our experience is that many such applicants have successfully secured a rental property through us” but does say it’s “ultimately the landlord’s decision whether to let to those receiving benefits”.

Bridgfords has yet to respond, and Dexters declines to comment.

Refusing to take housing benefit tenants is a discriminatory practice known as “No DSS” (“no Department for Social Security”, the welfare department that no longer exists but is still used as shorthand on letting ads). As Shelter’s chief executive Polly Neate commented, today’s landlords are harking back to “an outdated and outrageous example of blatant prejudice”.

There is an echo here of private landlords in the Fifties and Sixties who would discriminate against potential tenants with the racist rule “No Irish, no blacks, no dogs”.

“Letting agents should be ashamed that discrimination is still happening today in the form of an outright ban on people simply because they depend on housing benefit,” said David Orr, chief executive of the National Housing Federation. “We know this is purely based on prejudice.”

And it’s a prejudice that’s making people homeless.

Stephen Tyler, 26, used to be a driver before he had a car accident that meant using a wheelchair. Based in Birmingham, he has been calling 20 landlords and letting agents a day across the West Midlands since February, in a bid to find somewhere for him, his wife and two children (aged one and three) to live.

So far, all have refused to take him because his family receive full housing benefit.

They used to live in a private rental before they were evicted by their landlord, who refused to make adaptions to their home after Tyler’s accident. Now his family are staying temporarily in the house of his wife’s mother – Tyler can’t get in or go upstairs, so he has been sleeping in his car since February.

“Even just today we’ve been ringing up estate agents and landlords,” he tells me over the phone from Birmingham. “They’re quite friendly to start with until you ask if they accept DSS. Then the conversation seems to change quite quickly and it gets quite aggressively like ‘no, we don’t accept DSS’, and sometimes they just hang up on you… It’s just ‘no’.”

Sometimes landlords will get his hopes up, but in a week will have housed someone who is working instead. “It really gets you quite low because you get your expectations so high… You kind of feel so low and down. Like you’re wasting your time.”

Tyler has previously had mental health problems, and he says this situation makes them worse. He also suffers physically from sleeping in his car every night – he has spinal and back problems up to his neck.

“I can wake up in the middle of the night and it’s like I’ve slept on a piece of wood and someone’s nailed the wood to my back, it’s just stiff and painful.”

People with disabilities like Tyler are three times more likely to need housing benefit. The majority of housing benefit claimants are women, at 60 per cent of the total. This means that landlords and agents who refuse to rent to claimants are indirectly discriminating against minorities and one gender – and therefore could be breaking the law under the 2010 Equality Act.

“It doesn’t seem like the council or even the government want to do anything about it,” says Tyler. “I don’t think the [government’s] there to help renters out. They’re only there to help themselves… It seems like the government are discriminating against DSS as well.”

Tyler sees his future as “bleak” and says for people in his situation, “it’s just basically fight for yourself”.

Today’s leading cause of homelessness – which has risen massively since 2010 – is the loss of a private tenancy. This precarious situation is exacerbated by the UK’s chronic lack of social housing, which means 1.64 million adults now rely on claiming housing benefit to help with expensive and often unpredictable rents in the private sector.

This means outright bans on “DSS” tenants puts people at risk of homelessness, as claimants like Tyler have discovered.

While it’s a prejudice that harks back to a time when housing associations were set up to give people rejected by private landlords a place to live, it’s also a very modern problem.

More welfare claimants are at risk of homelessness since the roll-out of Universal Credit began delaying recipients’ money for housing.

Ever since people began claiming Universal Credit, I’ve heard stories from claimants who have lost their homes because of the system’s notorious delays in paying their housing element.

Rent arrears have been soaring since the welfare overhaul came in. This is due to the in-built wait for payments, as well as accidentally delayed or underpaid housing element, and the change from housing benefit being paid to the landlord to going directly to the Universal Credit claimant.

This has led to warnings that the new system will lead to an increase in evictions, with fears that as many as 1.3 million households could be evicted from their private rented homes because of the effect of Universal Credit.

One single mother I interviewed recently was evicted by her landlord because of moving over to Universal Credit, after being taken to court over four months of missed rent due to a glitch in her account that meant a long delay in payments.

When I spoke to her, she and her seven-year-old daughter were waiting for the bailiffs to turn up. “I don’t know where we’ll be after next Thursday,” she told me.

Another new Universal Credit claimant I interviewed, a 21-year-old student living in a hostel, ended up in four months of rent arrears because of a delay in receiving the benefit. After four months of hunger and anxiety, he owed £4,000 in rent. His housing benefit – which had previously been paid directly from the government to the hostel – was severely delayed.

“If you’re not paying rent or they’re not receiving money from the government, you have to leave the establishment,” he told me at the time, when he had nowhere else to go.

It seems the spirit of those notorious “No Irish, no blacks, no dogs” signs of the postwar years is being resurrected by landlords today. But this time, it’s: “No women, no disabilities, no welfare claimants”.