There are no arrears on Helena McAleer’s buy-to-let mortgage on a flat in Belfast. The tenant, a vulnerable older woman, has for more than two years always paid the £400-a-month rent on time. The money comes from housing benefit from the Northern Ireland Housing Executive. But when Helena approached her mortgage company, NatWest, for some additional borrowing, she was staggered to be told it would only be possible if she kicked out her tenant.

Why? Because NatWest, part of state-controlled RBS, won’t accept landlords having tenants on housing benefits. Given there are 4.2 million housing benefit claimants in Britain, that’s a huge segment of the population. And how very odd that the state bank discriminates against people on state benefits.

In Helena’s case, NatWest only spotted the tenant was on benefits long after granting the mortgage, because of an initial paperwork mix-up by the broker. That it is now prepared to see the woman evicted, even though she has been a perfectly decent tenant, is shocking. It’s not my position to disclose her health situation (she’s in her late 50s), but let’s just say a forced move will be hugely detrimental, and it’s not clear anyone else will accept her.

It’s not even clear how NatWest’s approach makes any commercial sense. As a lender, its contract is with the landlord, not the tenant. If the tenant doesn’t pay, the bank shouldn’t care – it’s the landlord who is legally liable. If the landlord goes into arrears, the bank can repossess safe in the knowledge that all buy-to-let mortgages have a maximum 75% loan-to-value. And what if a tenant goes on to benefits some time after occupying a property? Should the landlord meekly tell NatWest and accept that they must now throw them out?

In calls to me, NatWest was desperate to say it’s not throwing this woman out on the streets. But it was explicitly clear in its correspondence with Helena that “the options available to you are to seek an alternative tenant or move your mortgage to another lender”.

Helena, to her great credit, has done the right thing: she has refused to throw out her tenant and told NatWest to get lost, taking out a mortgage with a subsidiary of Lloyds instead.

She has also gone a step further and organised a petition to stop banks discriminating against welfare recipients. She’s not your usual landlord; she understands life’s vicissitudes, having bought the Belfast flat when young, seen it collapse in value when Ireland’s property market bubble burst, lost her job, went to London in search of work, and is now just another tenant in London’s voracious rental market.

In a statement NatWest says: “The bank has specific lending criteria and is not able to offer mortgages in certain circumstances, which are made clear on a customer’s terms and conditions. There are alternative providers who may be better suited for customers in these circumstances.”

Housing charity Shelter takes a very different view, writing to NatWest boss Ross McEwan this week to say its policy may be unlawful. “Treating tenants differently just because they are in receipt of housing benefit is likely to amount to unlawful indirect discrimination under the Equality Act 2010,” it said.

It’s not just NatWest. According to MortgagesforBusiness.co.uk, as many as 20 lenders ban tenants on benefits. But perhaps if a lot of you sign that petition, their days may be numbered.

p.collinson@theguardian.com