Helena McAleer, a landlord from Northern Ireland, contacted her bank, NatWest after she discovered that the value of her property had increased and that there was a potential that she could release equity from the house. Following discussions with the bank, she was told that she would no longer be able to receive her buy-to-let mortgage from Natwest as it was the bank’s policy not to allow rentals to benefit claimants.

Research carried out by the Residential Landlords Association’s (RLA) mortgage consultants, 3mc, last year found that 66 percent of lenders representing approximately 90 percent of the buy-to-let market do not allow properties to be rented out to those in receipt of housing benefit. This includes TSB, Virgin and Natwest.

In a letter being sent to the Treasury Minister responsible for banking, John Glen MP, the RLA is calling for:

  • The Government to use the influence it has in those banks in which it currently has shares to end such discriminatory practices.
  • The Financial Conduct Authority (FCA), working with the Bank of England, to undertake a full investigation into the extent of this problem and prepare plans to end it. The RLA believes such practices breach a number of principles within the FCA’s ‘Treating Customers Fairly’ agenda.
  • The Equalities and Human Rights Commission to undertake a review of whether such practices breach equalities law.

David Smith, Policy Director for the RLA said: “With growing numbers of benefit claimants now relying on the private rented sector, it is shameful that many lenders are preventing landlords renting property to some of the most vulnerable in society with little or no justification. The banks have had long enough to get their house in order. It is now time to take firm action to stop such unjust practices.”