The case, heard at York County Court, involved a single mother who inquired about renting a two-bedroom property in the city, but was told her application would not be considered as she was in receipt of housing benefit.

District judge Victoria Mark ruled that the prospective tenant had been indirectly discriminated against due to her sex and disability.

The judge concluded: “The defendant’s former policy of rejecting tenancy applications because the applicant is in receipt of housing benefit was unlawfully indirectly discriminatory on the grounds of sex and disability contrary to sections 19 and 29 of the Equality Act 2010.”

Housing charity Shelter, which had taken up the case on behalf of the mother, described the ruling as “a huge breakthrough” for its End DSS Discrimination campaign and a “clear warning” to landlords.

Chief executive Polly Neate said: “This momentous ruling should be the nail in the coffin for ‘No DSS’ discrimination.

“It will help give security and stability to people who unfairly struggle to find a place to live just because they receive housing benefit.

“Shelter’s ‘No DSS’ campaign has had a tough fight for people’s right to a safe home.”

Rose Arnall, the Shelter solicitor who led the case, added: “This is the first time a court has fully considered a case like this.

“It finally clarifies that discriminating against people in need of housing benefit is not just morally wrong, it is against the law.

“This sends a huge signal to letting agents and landlords that they must end these practices and do so immediately.”

The claimant, referred to by the pseudonym Jane by Shelter, had been looking for a new home in October 2018 after being subject to a “no fault” eviction by her previous landlord.

After she was rejected by the letting agency, she was made homeless and she was forced to move into a hostel with her children.

Jane said: “I was shocked and found it very unfair that they wouldn’t even give me a chance.

“I had excellent references from both my landlords of the last nine years as I’ve always paid my rent on time and I had a professional guarantor.

“I could have paid up to six months’ rent in advance because my parents lent me the amount.

“When the letting agent wouldn’t take me because of a company policy, I felt offended that after all those years when I have prided myself on paying my rent, paying my bills, being a good tenant, it just meant nothing.

“When I realised I was going to be homeless because I couldn’t find anywhere, I felt sick to my stomach.”

The letting agent in the case cannot be named for legal reasons.

Minister for rough sleeping and housing Luke Hall MP said: “Everyone should have the same opportunity when looking for a home and discriminating against someone simply because they receive benefits has no place in a modern housing market.

“That’s why we have been working with landlords and letting agents to help ensure prospective tenants are treated on an individual basis and that benefits are not seen as a barrier to giving someone a place to live.”