✓ PIMS Renters’ Rights Compliant
This page explains the current legal position regarding tenants who receive housing benefits.
Can a landlord refuse a tenant simply because they receive benefits?
No.
Landlords should not operate blanket policies that exclude applicants solely because they receive housing benefits.
Policies often described as “No DSS” have been widely challenged and may amount to unlawful discrimination depending on the circumstances.
Each applicant should instead be assessed on their individual financial position and ability to meet the rent.
Why were “No DSS” policies challenged?
Court decisions have found that blanket policies excluding tenants who receive housing benefits may indirectly discriminate against protected groups under the Equality Act.
For this reason, landlords should avoid advertising or operating policies that automatically exclude benefit claimants.
Can landlords still carry out financial checks?
Yes.
Landlords may still assess whether a tenant can afford the rent.
This can include:
- Income checks
- Affordability assessments
- Credit referencing
- Guarantor requirements
- Rent guarantee insurance criteria
These checks should apply to all applicants regardless of whether their income comes from employment, self-employment or benefits.
What if the landlord’s mortgage lender imposes conditions?
Some buy-to-let mortgage lenders have conditions relating to tenant income or tenancy types.
Landlords must comply with the terms of their mortgage agreement.
If a lender places restrictions on the type of tenancy allowed, landlords should seek clarification from their lender before accepting a tenancy.
What if rent guarantee insurance requires income thresholds?
Many rent guarantee insurance policies require tenants to meet minimum income thresholds.
These policies may also require a guarantor where the tenant’s income is below a specified level.
Landlords should check the terms of any insurance policy before relying on it as part of their tenant vetting process.
What is the safest approach for landlords?
The safest approach is to assess each tenant individually based on affordability rather than the source of their income.
This helps landlords demonstrate that they are applying fair and consistent criteria to all applicants.
PIMS guidance for landlords
When assessing prospective tenants, landlords should focus on financial reliability and affordability rather than the type of income received.
Clear referencing procedures, documented affordability checks and consistent tenant vetting processes help landlords demonstrate that decisions are based on legitimate financial criteria.
More guidance on tenant referencing can be found in the PIMS Tenant Vetting Guide.
Need help assessing tenants and managing risk?
PIMS members receive practical landlord guidance, tenancy documentation and access to the PIMS helpline.
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