Renting with Housing Benefits: Navigating Letting Agent Policies13 December 2023
Understanding letting agency policies for housing benefits is important for everyone, not just people in property management. It is crucial to understand what housing benefits are and how this can affect gaining rent approval to ensure a positive renting experience for all parties involved. In this guide, we have compiled the must-know information about how housing benefits can affect renting and how you can increase your chances of gaining rent approval.
- What Are Housing Benefits?
- What is a Blanket No DSS Policy?
- What is a Tenant Check?
- Can Letting Agents Refuse Housing Benefits?
- Do Letting Agents Accept Housing Benefits?
- How Can I Increase My Chances of Gaining Rent Approval?
- What Does This Mean For Your Renting Journey?
What Are Housing Benefits?
Housing benefit is a sum of money to help you pay for your rent provided by the Government. However, housing benefit is being replaced by Universal Credit. This means you can no longer create a new claim for housing benefits unless you have reached State Pension age and/or are in supported, sheltered, or temporary housing.
Universal Credit is a lump sum payment paid to you to cover a number of different elements including rent. Although housing benefit is being replaced, this guide applies to potential renters who receive both Universal Credit and housing benefits.
Am I Eligible for Housing Benefit/Universal Credit?
There are certain criteria you must meet to receive this aid. To be eligible for housing benefit you must have reached State Pension age and/or in supported, sheltered, or temporary housing.
To be eligible for Universal Credit you could be:
- Out of work
- Working – including self-employed or part-time
- Unable to work – e.g. due to a health condition
Additionally, there are criteria to claim. This includes:
- Live in the UK
- Be aged 18 or over – there can be expectations to be 16 or over
- Be under State Pension age
- Have £16,000 or less in money, savings and investments
What is a No DSS Policy?
Potential renters who receive housing benefits are also referred to as DSS tenants. DSS stands for Department of Social Security. Whilst this department no longer exists, the term DSS tenants is still widely used.
A “No DSS Policy” is where letting agencies and landlords refuse potential tenants that receive housing benefits or Universal Credit. Examples of this could be being refused by a letting agent to view a property that you can afford or letting agencies that openly advertise “No DSS tenants”.
Are No DSS Policies Legal?
No DSS policies are discriminatory. There have been several landmark cases that have defined No DSS policies as indirectly discriminatory as although receiving housing benefits is not covered in the Equality Act 2010, women and people with disabilities are disproportionately affected by these policies.
What is a Tenant Check?
A tenant check is used to screen potential tenants. A number of factors are examined in this process including a tenant’s background and financial history. These factors are used to determine whether the potential tenant is suitable for renting the property.
This means a credit check and affordability check may be performed to assess your suitability for renting. However, you only need to inform a landlord or letting agency that you receive housing benefits if they ask you.
Can Letting Agents Refuse Housing Benefits?
Letting agents can refuse any prospective tenants as long as there is a justifiable reason. This means landlords and letting agents cannot overtly discriminate against potential tenants who receive housing benefits.
Nevertheless, landlords and letting agents could use different reasons to discreetly refuse tenants. For example, the reasoning of unaffordability may be used. If this happens to you, you could ask your letting agent to check other criteria that may enhance your application such as:
- An affordability check
- Extra references
Do Letting Agents Accept Housing Benefits?
Some letting agencies openly state they accept prospective tenants with housing benefits. Although these agencies may be hard to come by, your local council may be able to help. Councils usually keep a list of landlords that accept housing benefits to navigate potential tenants in the right direction.
How Can I Increase My Chances of Gaining Rent Approval?
There are a few ways that may increase your chances of gaining rent approval if you receive housing benefits. We have compiled a list of strategies that are recommended below:
Enhance Your Credit Score
Your credit score will be one of the factors taken into account during a tenant check. To increase your chances of gaining rent approval, you should attempt to get the best score possible. This means making sure you have no late payments and avoiding overdrawn money.
Find a Guarantor
A Guarantor is a person who will pay your rent payment if you are late paying your rent. This provides landlords and letting agencies with a buffer to ensure they still receive their rent payments.
Although a common stigma of prospective tenants with housing benefits is they will make late rent payments, having a guarantor will increase your chances of gaining rent approval as landlords have the peace of mind that they will still receive their payments.
Offer Advanced Rent
By offering a rent payment in advance, this could show you can afford to rent the property. This does mean you will have to save money ahead of time, however, it could be a good way to create trust between you and your landlord.
Negotiate the Deposit
Another way to try and secure rent approval is to offer to pay a greater deposit. This is not necessarily fair to the prospective tenant as they will have to save more money beforehand but it could convey to landlords that you are serious about renting the property.
Local Council Schemes
Local councils can not only offer a list of landlords that accept housing benefit but also have a range of schemes and advice available to you. This can be anything from finding you temporary accommodation if you are facing homelessness to giving you financial advice.
Help to Rent
The Help to Rent database enables people to search for schemes that may assist them in finding accommodation. This database has a range of information from different schemes to information about different areas. By looking at the Help to Rent website, you may be able to find a scheme that works for you and your situation.
Contact Letting Agents
Contacting letting agents directly can also be helpful as they do not charge fees for things such as affordability checks meaning you could check whether you would be eligible to rent a property without paying any additional fees. This could also be helpful in understanding which elements in your application you could improve to increase your chances of gaining rent approval.
What Does This Mean For Your Renting Journey?
At LevelUP, we believe in creating a space that is both transparent and equal for everyone. This means if you are a prospective tenant with housing benefits, we will help you seek the best rental property for you. Additionally, if you are a landlord who wants a better understanding of how housing benefits affect you, we are also here to help.
Renting with Housing Benefits FAQs
How does housing benefit affect landlords?
There should be no effect on landlords that have tenants who receive housing benefits. The only difference may be that as the landlord, you may receive the housing benefit directly rather than through your tenant.
However, in most cases, the housing benefit payment will go directly to the tenant rather than the landlord so there should be no difference between having a tenant that receives housing benefits and one that does not.
Can landlords refuse housing benefit tenants?
Landlords and letting agencies cannot openly refuse prospective tenants who receive housing benefits. This is a form of discrimination. If you do refuse housing benefit tenants, you may harm your reputation and risk any claims made against you.
Do you have to tell your landlord if you receive housing benefits?
You do not have to inform your landlord if you receive housing benefits unless they explicitly ask you. If you then are refused, you could provide extra references or a guarantor to help increase your chances of gaining approval. Additionally, if you think you have been discriminated against, there are organisations that can help you appeal.