Of course you're right that the freeholder's action constitute discrimination, based upon prejudice, but that doesn't make them illegal.
In general anyone is free to display prejudice against, and to discriminate against, who they like (or, more accurately, who they probably don't like). It's only specific types of discrimination which are illegal under specific circumstances (e.g. when based upon the race, age, gender or sexual orientation of the person being discriminated against). Discrimination against poor people, homeless people, socially disadvantaged people or those in receipt of benefits is perfectly lawful. Whether that's a bad thing (because of the difficulties it presents to such people) or a good thing (because it enables landlords to retain their right to decide who occupies their properties) is a matter for your social conscience.
Chris