Landlord News

Nationwide also Removes Restrictions on Letting to Benefit Tenants

Rose Jinks - March 22, 2019

Nationwide has announced that it is the latest lender to lift restrictions that prevent buy-to-let landlords from letting their properties to tenants in receipt of benefits.

The move follows NatWest caving in to industry pressure earlier this month, by lifting restrictions on landlords letting to DSS tenants.

In October, NatWest’s lending practices came under attack after the bank told one landlord that she would either have to evict her tenant of two years, or take her mortgage business elsewhere, due to a blanket ban on benefit tenants.

Paul Wootton, the Director of Home Propositions at Nationwide, says: “Everyone should be able to access a safe and secure home suitable for their needs, but the continued presence of no DSS restrictions in the private rented sector denies this right to a group of people who are often in desperate need of somewhere to live. The repercussions of not being able to access good quality housing may leave many living in substandard properties.

“Nationwide is categoric on this issue – we do not place restrictions on landlords that could stop them letting a home to tenants in receipt of benefits.”

Around two-thirds of the largest buy-to-let lenders do not allow landlords to let their properties to tenants in receipt of housing benefits.

However, the Work and Pensions Committee has now written to a number of mortgage lenders about potential discrimination against benefit tenants, due to clauses in their lending policies.

Wootton explains the effect on Nationwide: “Recent interest in this issue, most notably from the Work and Pensions Select Committee and Shelter, with whom we have worked closely for a number of years, caused us to review both our own historic lending, and the terms of those societies we took over during the financial crisis.

“As a result, we identified and started contacting around 12,000 mortgage customers to reassure them that Nationwide has never and will never enforce any historic clauses, which might restrict them from letting to tenants in receipt of benefits, which their original mortgage terms may contain.”

He believes: “The increased focus on this issue is welcome, as are positive moves made by others, and we urge everyone, including lenders, agents and landlords, to consider what they can do to end this unfair approach. Tenants need certainty and consistency, and the industry needs a unified approach if we are to make a real impact.

“While it’s imperative that any blanket lettings restrictions are lifted, Government needs to ensure that the benefits system works properly to provide confidence for landlords.”

Wootton adds: “Nationwide believes everyone deserves a place fit to call home, but we need a more joined up and long-term approach to ensure this aspiration can be delivered.”