Private tenants who receive housing benefit are being widely discriminated against by private landlords and letting agents, according to a recent undercover investigation led by Shelter with the National Housing Federation. While many landlords operate a blanket ban on housing benefit claimants – or what many still refer to by the old moniker “DSS”, referring to the old Department of Social Services – others engage in more informal and subjective decision-making processes.

This discrimination is particularly concerning given the growth of the private rented sector, restricted access to social rented housing following welfare reforms and the centrality of the private rented sector within strategies to tackle homelessness.

In late 2017, the Department for Work and Pensions reported that of the 4.4m people receiving housing benefit to help fully or partially pay their rent, around 1.3m people live in the private rented sector. Research has shown that benefit caps and frozen levels of Local Housing Allowance, which helps private renters with housing costs, has directly contributed to homelessness through loss of private rental tenancies. Tenants hit by the harshest impacts of welfare reform are increasingly faced with the choice between paying for food, utility bills, or rent. As support for housing costs such as Local Housing Allowance is transferred to the controversial Universal Credit (UC) system, tenants face further financial challenges.

In the northern English city of Leeds, the difference between the cost of rented housing and the level of housing benefit is less than in other parts of the country, such as Manchester, Birmingham and London, where housing has become unaffordable to a widening proportion of renters. Despite this, my recently completed but as yet unpublished PhD research in Leeds found that people receiving housing benefit struggled to meet housing costs and were viewed as a significant risk to private rented sector landlords and letting agents.

Excluded by stigma

The landlords and letting agents I interviewed shared negative beliefs about benefit claimants, though some claimed to resist that stigma by operating more lenient lettings processes. Yet even in Leeds, an area where demand for housing is relatively low compared to other parts of the country, landlords and letting agents emphasised their freedom to “pick and choose” based on judgements about behaviours and character.

Their perceptions about problematic or chaotic lifestyles were particularly strong when they described people referred from the council through homelessness prevention interventions such as private rental access schemes. Several landlords had refused to accept tenants through these routes. Even for general applicants, one landlord described the value judgements that impacted her decisions to deny properties to applicants:

We just get a feel for the person really. If they feel a little dim or … it sounds a bit harsh but … or if they seem a bit rough.

Pre-tenancy screening through social media, or credit and previous landlord checks forms an integral part of decision making by most landlords and letting agents. However, there was an overall acceptance that arrears were common and were expected among people receiving benefits. The willingness of landlords to accept this risk depended largely on the availability of other, less risky applicants.

Yet there were also more complex factors at play in the selection of tenants, especially when letting within shared accommodation. The landlords and letting agents I interviewed described denying tenancies to people in order to mitigate potential gender or racially-aggravated violence. They also described separating people who were known to be using substances from those recovering from substance abuse, highlighting what they considered to be the unrecognised social responsibilities of private landlords.

Some landlords saw the lack of information available to them about tenants as a safeguarding risk, which prevented them from acting as responsible landlords.

Excluded by design

The private landlords and letting agents I spoke to shared particular frustration with the local administration of housing benefit under the previous system – which is still in place for people who have not yet transferred to Universal Credit. A letting agent who managed a large number of private lets for people receiving housing benefit described her experience of administration errors, which she said led to “a lot of evictions”.

Reports of mounting arrears caused by the roll out of Universal Credit was an additional concern for some landlords. Another letting agent expressed her view of the future of housing benefit lets within the private sector:

I’m hoping that we’ll still be able to do DSS tenants, even if it’s at a level where I have to rent them out at market value. But, I think at that point the landlords will think well, I’ll go to an employed person where I can get a (deposit).

Meanwhile, other in-work households who receive income support, working tax credits and child tax credit are also set to transition to UC from the summer of 2019. This will be a total of around 3m additional households who may also be subject to discriminatory practices within the private rental sector.

At the same time, social rented housing provision has become increasingly difficult to access. My own research and others have found that social landlords are also exercising discrimination against people with significant arrears which may be caused by welfare reforms, as well as more complex social support needs. If private and social tenancies have become dependent on financial and other subjective markers of suitability, the government must address the ways that its own policies have contributed to the lack of housing options available to growing parts of the population.