Government committee slams bank’s ‘DSS housing backlist’


A bank’s refusal to re-mortgage a property because the applicant was renting to a tenant on housing benefit (HB) has been slammed by a government committee.

In October, NatWest came under fire after it refused landlord Helen McAteer’s application – and actually threatened revocation of the existing mortgage because of the sitting tenant’s receipt of HB.

She was told by the bank to either evict her tenant, a vulnerable elderly lady, or pay the early repayment charges and forego the mortgage as it was the bank’s policy not to allow rentals to a ‘DSS claimant’.

Now the Commons Work and Pensions Committee has stepped in, urging the government to intervene in the ‘housing blacklist’ run by lenders’ ‘no DSS’ policies.

In correspondence with the committee, NatWest’s CEO, Ross McEwan, expressed the bank’s ‘extreme disappointment’ with the way the case was handled, claiming it ‘did not reflect the values of [the] organisation’ and promising an immediate review its lending practices.

However, the CEO’s letter also states that ‘in line with a number of other lenders…our mortgage policy for landlords with smaller property portfolios…includes a restriction on letting to tenants in receipt of housing benefit. This reflects evidence that rental arrears are much greater in this segment of the market and we are satisfied that this restriction does not contravene equality legislation.’

According to the committee, there are 4.2 million people in receipt of HB in the UK – and research by the Residential Landlords Association found that 66% of lenders, covering 90% of the buy-to-let market, have this kind of prohibition on lending.

The committee says it is ‘deeply concerned about the extent to which mortgage providers are therefore preventing landlords from renting to benefit claimants, especially given the desperate shortage of affordable housing and the large numbers of claimants now dependent on the private rented sector’.

Committee chair Frank Field MP said: ‘The government claims its welfare reforms are intended to drive employment, but allowing banks to operate a “no DSS” policy is a return to the wicked old days of housing discrimination, with claimants effectively blacklisted for housing and at risk of being senselessly evicted for no greater crime than receiving housing benefit.

‘NatWest is now taking a look at its policy, and other mortgage lenders will no doubt follow suit. If the change we need to protect people is not forthcoming voluntarily, we may need to look to regulation.’

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