Amid the devastating effects of the Covid-19 pandemic, in July 2020, a landmark ruling at York County Court quashed a decades-old element of discrimination which campaigners hailed as a great breakthrough. The so-called ‘No DSS’ ban was used by landlords and letting agents to restrict their tenancies, denying applications from anyone claiming benefits. But still, this discrimination remains, hindering prospects and making independent living a distant dream for young people on low incomes.
‘DSS’ itself is an archaic, sinister artefact of the Department for Social Security, which later became the Department for Work and Pensions in 1997. It was the government department of dole queues, subsistence welfare and punitive rhetoric. The name has changed but its image remains just as bleak. Adverts for flats and rooms have often displayed ‘No DSS’ to ward off benefits claimants.
As a recent replacement, letting agents and landlords now declare that benefits tenants are welcome, or that enquiries can be made. But this is not as transformative as it seems – as with the culture of renting – there’s a big, unfair catch.
Rosie, a 25 year old from Edinburgh, explains: “When I told them [my letting agent] about recent court cases surrounding discrimination on the basis of receiving benefits, they told me it wasn’t their policy.” It’s important to note that the July 2020 legal ruling has since been succeeded by two more court cases being won: one from Birmingham in February 2021, another from Worthing in March.
The evidence against benefits discrimination should be seen as conclusive. The judge in the Birmingham court case stated plainly: “I would draw to the Court’s attention the fact that there is widespread agreement, ranging from MPs to landlord associations, that No DSS policies are not justified.”
But the lack of cast-iron legislation or a ruling in the High Court has allowed alternative methods of discrimination as vindictive as the ‘no DSS’ label to flourish. Letting agents and landlords may ask an applicant to provide a guarantor, pass affordability and credit checks, or provide references from employers.
The biggest weapon in this arsenal is the need for a guarantor: someone with enough money to pay up the rent if the tenant can’t afford it. Students are often handed this requirement when seeking accommodation in their university cities – it’s seen as a protection for the landlord against being short-changed.
Students in London faced a big dilemma when guarantor insurance offered by UCL was suspended, forcing thousands of young people to quickly find private guarantors to be able to apply for tenancy. People from low-income or estranged backgrounds faced immense difficulties when it came to proving they were good for their landlord’s rent.
For Steff*, a 22-year-old graduate from Glasgow, it’s a deeper problem. “I often feel the guarantor requirement is also a class issue,” she explains. Steff’s estrangement from her family at age 16 made renting privately an urgent need. “I found no flexibility in navigating this [guarantor requirements] as landlords just do not want to hear it if you tell them your personal circumstances.”
The housing and homelessness charity Shelter were crucial in supporting the three court cases on ‘no DSS’ bans. Research published in September last year found that 40 per cent of private rented households were claiming some form of housing support, be that through Universal Credit or legacy housing benefit. The impact of the Covid-19 pandemic had created a groundswell of new claimants to add to an already fragile welfare state.
If such a large proportion of renters are needing to claim benefits to pay their rents, it begs the question as to why landlords and letting agents are making these punitive checks in the first place. Shelter also established that 71 per cent of families in the private renting sector have no savings to fall back on. Steff’s financial aid as a student helped her with paying deposits, but she went on to say: “It was incredibly frustrating… the lack of a guarantor signature was preventing me from gaining access to accommodation.”
It’s become something of a meme to self-deprecate about a younger generation blocked from owning a home. Having your own place isn’t just a room with four walls and a house plant to keep you company: it’s independence of finances, lifestyle and aesthetics. At university, either in halls of residence or grotty flats, there’s still an element of restriction that comes from knowing your accommodation isn’t permanent. Renting privately, with your own space to mould into your image of a perfect home, is a dream to fulfil.
Peter is a 24-year-old graduate living in Bristol. He moved to the city in 2019 after landing a job with a design company: “I come from West Yorkshire, so it was far enough away from home. I needed that space for myself.” When Covid-19 struck, he was made redundant and forced onto Universal Credit to live a subsistence lifestyle. “I’d been on Jobseekers Allowance for a few months before but the process of sorting out Universal Credit was a nightmare, especially when I had spent all my savings on the move to Bristol.”
Saving hundreds, maybe thousands of pounds, to afford those initial costs for renting is a necessary evil. Holding fees, admin fees, reference fees – they all manage to eat up the precious months of scrimp and save. Due to trouble with his flatmates, Peter looked for another place to live and faced the same brick wall of restrictions Rosie and Steff found.
“It was just so unfair. They wanted six months of rent upfront if I couldn’t provide a guarantor. How many people our age have six months of rent lying around in a savings account?”
Peter’s anger is justified; Steff’s assertion that it’s a class issue has weight, too. It goes back to the symbolism of the DSS tag. Building a catalogue of requirements to make applying for tenancies harder and more exclusive to those that can afford the luxury of a good home. A YouGov survey in January last year found that this isn’t just speculation but clear discrimination, with 63 per cent of private landlords operating a ban or preferring not to rent to tenants on housing benefit.
Rosie also added that she is disabled, which makes the process even harder: “[Because] I’m not sure I’ll ever be able to work full time, I did think, ‘Is this just what the rest of my life is going to be like?’”
How can this imbalance be shifted? The campaign group Generation Rent have worked to raise awareness of the crisis facing UK renters, especially through the pandemic. Their focus on arrears, deposits and building better housing policy has been leading the wider social movement against dodgy landlords.
Would benefits discrimination be solved by wider culture change or simply by having better landlords? Rosie responds: “There won’t be better landlords without new laws. Getting rid of the guarantor schemes seems like a good idea.” She adds: “Regulating the landlords insurance seems to also be part of it, as it sort of shifted the blame from the landlord and the letting agents onto a more anonymous company’s system.” This line of argument was echoed in the Birmingham legal ruling also.
Steff, responding to the same question, says: “There should be an alternative way to prove ability to pay rent… I also think landlords should be encouraged to be a bit more flexible and to understand that not everyone can provide a guarantor.” The current answer to Steff’s idea of six months’ rent upfront is clearly not achievable for many young people. Peter explained further “I couldn’t believe that was an option on the table. That needs to go for a start…We can’t be expected to provide everything they want.”
The court rulings have laid the legal groundwork for a change in how landlords and letting agents treat people on benefits. The assurance of rent guarantees and better access to deposit and arrears schemes, as highlighted by Shelter and Generation Rent, could provide tenants with the support needed to manage private renting whilst on a low income.
As for now, the sector remains locked for the people who need it most. Any government of any party should see that young people prosper best with freedom and support – a solid roof over one’s head is the best place to achieve that from.
*Name changed to protect identity
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