Bedroom Tax Pain Exacerbated by Right-to-Buy induced Shortage

bedroom-tax-pain-exacerbated-by-right-to-buy-induced-shortage

The “Bedroom tax” has received considerable publicity of late and further criticism has drawn attention to the problem that tenants who cannot downsize,  still have their benefits reduced regardless – leaving many unduly punished for the council’s lack of property provision.

Research by the “I” newspaper has shown that thousands more one and two bedroom houses have been sold off by Local Authorities and Housing Associations via the right to buy scheme.  In some areas, more than two thirds of houses sold off under the Right to Buy scheme have been one and two bedroom properties.

Central London has been selling off smaller sized homes at a rate, with Camden showing some 81% of sales since 2010 being two bedrooms or fewer.  Outside the capital, Brighton and Hove have sold off some 74% of properties with two bedrooms or fewer.  Bournemouth has reportedly only sold off some 20 properties under the scheme of which all were found to be of a smaller size.

With an average of some 61% of homes in the Social Housing sector being either one or two bedrooms in size, the disproportionate sell off in some areas is creating problems.  Whilst tenants are financially induced to reduce the size of their homes where these homes are being under-utilised by the ‘Bedroom Tax’, there is a shortage of smaller homes for these tenants to move into.

The income generated is used ostensibly to build additional small homes, but construction takes time and there is a lag between the home being purchased under the Right to Buy scheme and the funds generated being able to fund and then build a replacement home.

The Chief Executive of the Child Poverty Action Group, Alison Garnham, said that the figures exposed the tax as a “hasty shambles” which had forced some of the most vulnerable children into unsuitable housing.

The Child Poverty Action Group state that:

“The government has committed to building new affordable (homes) but other policies look set to take us further from the ideal of a decent home for all, than ever. For example, changes to housing benefit such as the cap on the maximum number of rooms per claim, and the down- rating of the maximum HB claim from 50 per cent to 30 per cent of median rents, will condemn many low-income families to lives in poor quality and often overcrowded housing.”

As reported by us last month, the number of private landlords prepared to accept tenants on housing benefit has been reduced. It is no longer possible for housing benefit to be paid directly to landlords. As a consequence, as it is a strong rental market, many landlords are seeking a stronger covenant from more financially stable tenants.  Complicating housing benefit further through the ‘Bedroom Tax’ only exacerbates the pressure on those private landlords still prepared to accommodate tenants in receipt of benefits. The result is potentially thousands of social tenants hit hard by reduced benefits with nowhere else to go.

www.propertysurveying.co.uk

LB

Comment on this article