Landlords Corner – New Bill Could Lead To Bank Account Monitoring
A new government bill going through Parliament could allow the Department for Work and Pensions (DWP) to monitor the bank accounts of landlords who receive rent payments directly from housing benefits. This will now need to wait for a new government, and all could change; however it’s worth being aware of what was being proposed.
The Data Protection and Digital Information Bill aims to crack down on benefit fraud and overpayments by giving the DWP powers to check bank accounts linked to benefit claims. This includes "connected accounts" like landlords receiving rent from the DWP.
Some MPs and Lords are sounding the alarm. A Labour peer warns landlords may simply refuse benefit tenants to avoid having their accounts monitored. A Conservative Lord cautioned up to 40% of bank accounts could be checked under the bill's provisions.
There are genuine concerns over how measures are managed
20 MPs and Lords wrote to the government citing concerns over mass surveillance and lack of reasonable grounds for snooping through millions of accounts. They referenced the Post Office Horizon scandal where faulty data led to wrongful prosecutions.
The DWP argues the powers are needed to address over £8 billion in overpayments from fraud and errors over the past 3 years, as benefit spending tops £230 billion annually.
Landlords should pay close attention as this bill could impact taking on benefit tenants and having private financial data monitored by the DWP. We'll keep you updated as the bill proceeds.
Many landlords will be unhappy at the intrusion
The potential for DWP monitoring of landlord bank accounts tied to benefit payments is a significant privacy concern. Having private financial data open to government scrutiny without reasonable grounds is overreaching. As referenced, there are troubling precedents like the Post Office Horizon scandal where faulty data led to lives being ruined.
HMRC is being more proactive of late, with this story following on from their crackdown on the rising number of social media influencers and how they pay tax.
Beyond the civil liberties issue, there is the very real possibility that some landlords will simply opt out of renting to tenants on benefits to avoid this level of surveillance and invasion of privacy into their accounts. This could drastically reduce housing options for those relying on benefits.
Additionally, the administrative burden on landlords to comply with any new data sharing requirements with banks and the DWP adds an unwanted layer of complexity and hassles. There are already enough regulations and hoops for landlords to jump through.
As industry experts, we can analyse the impacts and risks for our landlord clients. We can also collectively advocate for landlord interests if the final law proves too draconian or unworkable.
Letting agents are a vital link in ensuring landlords are up-to-speed on any legislative changes that affect their ability to operate and maintain their portfolio. We have the perspective to translate complex policy into practical real-world implications.
Whether this particular bill passes as proposed or not, there will inevitably be more new rules, regulations, and laws in the future that impact the rental market. Maintaining an open line of communication with your letting agent is the best way to stay ahead of the curve as a Leytonstone landlord.
If you are looking for guidance on the Leytonstone rental market, or you just want a helping hand in complying with rental market regulations, we are always here to assist you.
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