On the day of the Cabinet reshuffle, a day when news has been concentrated on who’s in and who’s out – a report was published by the Department of Work & Pensions on the effect of the ‘Bedroom tax’.
Known officially as the ‘Removal of the Spare Room Subsidy’.
Its an interesting report. I was alerted to it by Nearly Legal who have summarised its findings here.
The report itself can be found here.
As reported by Nearly Legal:
- Social landlord rent arrears rose by 16% between April – November 2013 (not a time traditionally, when arrears rise)
- The percentage of tenants able to downsize (the main aim of the exercise) – 4.5%
- The number of tenants moving to the more expensive PRS – 1.4%
- The number of tenants in arrears because of the bedroom tax – 59%
There is a lot more, but as you can see, this does not make happy reading.
Well over half of tenants affected by the tax have gone into arrears but only a very small proposition have been able to ‘downsize’.
The main reasons for this are:
- Lack of suitable properties available, and
- Tenants unwilling to move because they do not want to move away from family, schools, support services etc
The effect of all this
Moving home is not something to be done lightly. It is one of those big stressful events in peoples lives, up there with divorce, death in the family, changing jobs etc.
It is not something that vulnerable people will be able to tackle easily I suspect, even if the process of finding somewhere else to live was easier. But it isn’t.
The demand for small properties has rocketed. For example, people who before would have been housed in two bedroom properties are now only eligible for one bedroom properties.
This has had an inevitable knock on effect on all the single people looking for this type of home (whose numbers are increasing anyway). There simply are not enough suitable homes for everyone.
Conversely it seems its now much easier for larger families to find homes – indeed apparently some of the larger properties are proving difficult to let.
Problems for social landlords
It may be that landlords will be able to adapt the larger properties in due course to split them up or turn them into HMOs. However this will take time and money. Building work is not cheap.
This is another thing that bothers me. That big increase in rent arrears is going to impact seriously on the social landlords’ ability to build new homes and adapt the ones they have for smaller households.
The report says that lenders are not worried about social landlords defaulting on loans (so they won’t go bust), but that does not mean they will have funds available to restructure their housing stock to adapt to the new demands.
The final report
This report is just an interim report, and apparently a final report is to be published in 2015. It will be interesting to see what it says.
Although no doubt it will be slipped out quietly, on a day when there is a lot of other news. Like this one.
You can read the full report here.