NatWest has made changes in its buy-to-let mortgage proposition and life all restrictions on landlords renting to tenants who are in receipt of housing benefits.
The decision comes after the bank conducted a review of its buy-to-let policies, to better understand the market and challenges that landlords and their tenants face.
Shelter and the Residential Landlords Association agreed to work with NatWest in shaping its understanding of the challenges renters and landlords face and submitted information and insight that fed directly into the review.
Ian McLaughlin, managing director of home buying & ownership at NatWest, said: “I am pleased that we are introducing these changes and extending our policy to support smaller landlords in this segment of the market.
“We would like to thank Shelter and the Residential Landlord’s Association for their thoughtful and thorough contributions to the review, to help us better understand the market in this area, and bring our policies in line with those in our commercial segment.”
John Stewart, policy manager for the Residential Landlords Association, said: “We warmly welcome [the] announcement from NatWest. Around 20% of all private sector tenants are in receipt of benefits and we need to do all we can to support them to find the homes they need.
“NatWest’s decision will make it easier for landlords to rent to benefit claimants, and agree long term tenancies where suitable. We urge other lenders to follow this lead.”
Greg Beales, campaign director at Shelter, said: “Today is an important moment in the fight for fairness as NatWest have decided to call time on ‘No DSS’ policies. All landlords who use NatWest’s policies – both old and new – will be told they can now rent to people who receive housing benefit, which is a huge step forward.
“We know all too well the damage caused when renters receiving benefits can’t get a foot in the door, which is why it’s time for everyone from lenders to letting agents to landlords to join NatWest in cleaning up their act. Today’s announcement shows that change is possible and together we can fight discrimination.”
These changes will affect new and existing landlords with fewer than 10 properties. The review brings it in line with NatWest’s policies for commercial buy-to-let customers, who have more than 10 properties.
The bank has also decided to extend the maximum length of time of assured shorthold tenancy from 12 months to 36 months, which allows landlords to offer tenants the security of longer tenancies.