A large proportion of tenants hit by the bedroom tax have so far failed to pay the resulting shortfall in their rent. Several of the UK’s largest housing associations have this week revealed thousands of tenants have not covered their rent since the controversial policy was introduced on 1 April.
The bedroom tax cuts the benefit payment of working-age social housing tenants with spare bedrooms. In some parts of the country, up to half of affected tenants have not paid anything at all to cover the average £14-a-week shortfall. This has sparked fears that landlords’ income streams and ability to borrow cheaply to build new homes could be hit if the trend continues.
Liverpool-based Riverside Group said around half of its 6,193 affected households receiving full housing benefit have not paid anything at all to cover the shortfall, while a quarter contributed something but did not pay their rent in full. Just one in four affected tenants paid the full amount.
James Tickell, director of consultancy Campbell Tickell, said: ‘These are the first signs of a significant threat to housing associations’ income streams.’ Hugh Owen, director of policy and communications at 54,000-home Riverside, said: ‘Such a significant amount of people paying nothing proves there is a real issue of affordability.’ He added that some of the non-payment may be due to delays in setting up direct debits or to tenants awaiting decisions on discretionary housing payments and that a clearer picture will emerge after several months.
Guinness Partnership said a third of 3,000 affected tenants have not met the shortfall. Simon Dow, chief executive, said: ‘If a third of our residents are not able to pay the whole of their rent, then obviously there would be a significant increase in arrears… as well as a crisis for the household.’
Yorkshire-based, 25,000-home Incommunities said 601 of 2,414 affected households had not paid anything to cover the shortfall. Wakefield and District said 42 per cent of 5,000 affected households have not paid their rent, while two-thirds of the 7,350 tenants of Glasgow and Cube housing associations had underpaid.
Spectrum Housing Group said 250 of 1,100 affected households failed to pay any of the shortfall at a cost of £13,000 in income – a result it described as ‘better than expected’.
Source: Inside Housing
17th May 2013
The minister for welfare reform has said he is concerned about the impact the bedroom tax could have on separated families, but sofa beds could be a solution.
Lord Freud told MPs on the Welsh Affairs Committee he did worry about fathers getting access to their children at the weekend. He said: ‘Clearly these are measures about costs and one of the things is that family break-up, as we all know, is one of the most enormously expensive things, both for the individual and for society. The issue is how much of that cost can the state afford to bear?’
Committee chair David Davies, the Conservative MP for Monmouth, asked Lord Freud whether there was any reason why people having children to stay who did not permanently live with them could not make temporary arrangements, such as the use of sofa beds. The minister replied: ‘Some people may find it’s worthwhile spending the extra £12 a week to have that facility [an extra bedroom], others will use a sofa bed. The issue is that dual provision of those bedrooms is expensive. Basically, giving a child a bedroom in two places is a very expensive thing for the state to do and currently we can’t afford that.’ Lord Freud also told MPs that people struggling to pay the under-occupation penalty could ‘go out to work’ if they did not want to take in a lodger.
Under the policy, which came into force last month, social tenants of working age on housing benefit will have their payments cut if they have one or more spare bedrooms. A High Court challenge to the regulations is being heard this week.
Earlier in the meeting, Lord Freud had spoken about Stephanie Bottrill, a grandmother from Solihull in the west midlands, who committed suicide earlier this month and blamed the government for her death in a note. Her son, Steven, has said his mother, who lived alone in a three-bedroom property and faced finding an extra £20 a week for the two spare rooms, ‘was fine before this bedroom tax’. Lord Freud told the committee: ‘Clearly it’s a desperately sad and tragic event and I and my colleagues send their condolences to the family, but I am not in a position to make any further comment than that. Clearly the relative authorities need to investigate what actually happened and we don’t know yet.’
Source; Inside Housing
16th May 2013
The Government’s ‘bedroom tax’ has led to an increase in the demand for void professionals as more social housing tenants downsize their property.
The latest Professional Talent Spotlight from Badenoch & Clark also shows that housing roles have been impacted by right to buy. Claire Carter, associate director, housing, local government & charity, Badenoch & Clark, said: ‘After the recalculation of service charges at the end of the financial year, coupled with Osborne’s encouragement to exercise the right to buy, leasehold and service charge officer roles are prevalent this month.’
The analysis of the recruitment market also revealed that retention will be a growing challenge for charities, with the number of qualified finance professionals looking for new roles increasing.
17th May 2013