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Bedroom tax: housing advice wanted
Hi
We are wanting to talk with local housing associations to discus the option of re-classifying the number of bedrooms in a minority of properties hit by the bedroom tax.
What I am after is some tips on what difficulties or objections a landlord might have on a housing basis (rather than social security difficulties). Aside from the obvious issue of having to re-classify it if they needed to re-let it, are there subsidy arrangements or other issues that would cause them concern? What would be the housing/tenancy position of potentially adjusting the number of rooms in the property that are actually let to the tenant if they are genuinely not required as bedrooms (for example in long term independent living flats etc).
The related issue is agreement on issues such as whether people who run up arrears through the tax can still go on their re-housing list etc.
Has anyone else had dialogue with HA’s with any success?
Thanks
Jana
Hi
We are wanting to talk with local housing associations to discus the option of re-classifying the number of bedrooms in a minority of properties hit by the bedroom tax.
What I am after is some tips on what difficulties or objections a landlord might have on a housing basis (rather than social security difficulties). Aside from the obvious issue of having to re-classify it if they needed to re-let it, are there subsidy arrangements or other issues that would cause them concern? What would be the housing/tenancy position of potentially adjusting the number of rooms in the property that are actually let to the tenant if they are genuinely not required as bedrooms (for example in long term independent living flats etc).
The related issue is agreement on issues such as whether people who run up arrears through the tax can still go on their re-housing list etc.
Has anyone else had dialogue with HA’s with any success?
Thanks
Jana
Can’t help re the reclassifying issue but we’re in dialogue with local HA’s, local councillors and both local MP’s re the transfer/exchange with arrears issue. No outcome yet but will keep you posted.
Housing Associations are very reluctant to re-classify bedrooms for a number of reasons. Rent is their only source of income, and is largely based on the number of bedrooms. So re-classifying means a loss of income not just now but on-going. This will have inevitable knock on effect for budgets that will have already been set, and their credit ratings. In turn this means that borrowing will be more expensive and less properties will be built. Existing funders may well object as well.
Knowsley Housing Trust has reclassified 522 of its properties - but says that this will cost it £250,000 a year in lost income. Not a decision that every social landlord will be able to afford to take.
Social Landlords are already seeing their arrears going up due to the ‘bedroom tax’, and will take a huge hit when Universal Credit comes in - even just in terms of increased transaction costs (some are estimating an extra £250,000 - £500,000 per year). Rent arrears in the pathfinders have increased from 1% to 10% in some cases, and that’s with a lot of extra resource put in to support tenants.
So RSLs will be very wary of reducing their income by reclassifying when their income is already being affected, and their costs are increasing.
Hi JayKay
Thanks for your reply.
Clearly HA’s should not be expected to pick up the tab for the bedroom tax, and should, as you say, be wary of reducing their income.
However, what I would like to pull together are the reasons why it would be difficult to do this in individual cases – aside from the obvious financial problem of having tenants liable to pay them less rent:
For example, imagine you were a landlord with a delightful, long term, fully paid up, pillar of the local tenant association tenant in a hard-to-let property with a teeny weeny spare bedroom, so you have good reasons why you might want to help ensure the tenancy stays sustainable. The tenant says they cannot afford to pay the extra £10 rent due to HB reduction: what would be the technical /legal obstacles to saying that the property is actually a one bed not two bed property and reduce the rent by £1 per week, thus saving the landlord a lot of agro and rent arrears, though losing £52 per year?
Thanks for your help on this
Jana
Because they’d have to make the same change for every other similar two bed property.
Re-classifying from a two bed to a one bed would result in a much bigger loss than £52 per year. RSL’s have to bring their rents within target rent for the size of property - so reducing rent by £1 per week just couldn’t happen - and this loss would be ongoing.
Landlords might be prepared to reclassify in individual cases - but will be wary because it will open the flood gates. And the scenario you have suggested is a very subjective one - who decides who’s been a good tenant and who’s been a bad one? What if there are rent arrears that are not the fault of the tenant (eg a partner who has now left, took the rent money and spent it) or due to the tenant’s mental health problems - you then get into the realms of disability discrimination? Such a policy would cause so many problems in terms of challenges and complaints from tenants.
And the issue of reclassifying cannot be separated from the financial impact. Credit ratings / mortgage interest rates etc are based on the total value of the housing stock. Change the size of the properties, you change the value of the stock - and agreements with their mortgage lenders may prevent the reclassification for this reason.
On the narrow point of tenant behaviour see here.
http://nearlylegal.co.uk/blog/2013/04/tenants-be-the-best-that-you-can-be/