The far-reaching impact of a policy trimming around the edges of benefit expenditure continues to claim new potential victims – not least those working age tenants facing an average cut of £13 a week from next April.
Housing providers are frantically working out ways to support tenants and protect revenue streams ahead of the introduction of the bedroom tax next April – which will see working-age social tenants under-occupying homes by one or more rooms hit by housing benefit cuts.
This week we broke the news [see here] that the Department for Work and Pensions (DWP) is set to leave out the definition of a bedroom from the final regulations, leaving it to providers to classify bedroom numbers in homes – with the rent charged reflecting size and the number of bedrooms.
It’s widely acknowledged – by the Government itself – that there are huge stock mismatches across the country, thus providers are exploring ways to support tenants in their homes.
But in doing so, it appears the elderly – exempt from the under-occupation cuts (for now) – and the homeless could be put at risk as smaller homes are prioritised for bedroom tax “victims”.
What a cruel irony that the downsizing schemes run successfully by housing providers – focusing on helping the elderly downsize from larger unmanageable homes – will have to be stopped because the smaller homes will need to be prioritised for working age claimants who can’t afford to stay where they are. How perverse it is the sector can no longer afford to help those that want to move, but is forced to move those that don’t want to leave where they are.
And what a moral dilemma the bedroom tax proves when assessing the chances of single homeless applicants getting a one-bedroom home.
I spoke to a housing association yesterday who said they can no longer consider homeless applications for one-bed homes because those homes were “prioritised” for tenants hit by the bedroom tax. It said it had to focus on this group because if not, their debt would spiral and the landlord would face an arrears spike.
The reality is that the increase in homelessness applications is coming from another Government reform – the shared accommodation rate extension in the private rented sector for under 35s. Two housing associations I spoke to this week – including one who manages the homeless contract for the council – said they were seeing “slight” increases in this group presenting themselves as homeless. They expect to see even greater impacts in the next six to 12 months.
Providers have been busy crunching the numbers and assessing the impact of the bedroom tax, and, with the stock mismatch making it impossible to move all those under-occupying homes by next April, they are also looking at supporting people in their existing homes.
One of the emerging ideas – which they are seeking guidance on from the regulator – is around room reclassifications for special circumstances.
For instance, a family of four with different sex children under nine living in a three-bed home would be hit by a benefit cut, potentially forcing them into a two-bed home (children and parents sharing a room).
However, once the child hits 10, they would be exempt from a cut. For those on the cusp of turning 10, providers are looking at either discretionary housing payments to cover the year, or whether the third room – sometimes a ‘box room’ – could be reclassified as a study. However, although the tenant wouldn’t be hit by a cut to their housing benefit, the landlord would then have to forego the rent of a three-bed home for a year, so it still impacts on the business plan.
Other instances where this could help is where tenants are a year away from pension age – and thus a year away from exemption – or where a tenant has a disability and requires a carer.
Bromsgrove District Housing Trust, Halton Housing Trust [see here] and Bradford-based Incommunities said they were looking at reclassification possibilities.
Others providers, such as Wakefield District Housing, said it was introducing a flexible ‘dormer bungalow’ product (with a one-bed footprint) into its building plans – which could help support tenants with mobility issues requiring carers. Other new build innovations I’ve heard about are ‘sliding walls’ between two single bedrooms.
Most landlords are looking at cross borough working, but they are collectively faced by similar stock mismatches – particularly one-bedroom properties. This is largely because they’ve been demolished with the recent push to build larger properties which are more popular and easier to manage.
In that respect, some are looking at lodgers – particularly matching single applicants with tenants in two-bed homes, although joint tenancy agreements will need to be looked at. Families with children, predictably, haven’t been receptive to the idea of bringing in lodgers.
Most landlords are ramping up their financial advice teams, ensuring tenants are aware of the changes but also to help support training and employment, and, where possible, to increase working hours to cover the shortfalls. A common theme emerging from landlords is that despite the sector talking about this for the last 12 months, when they tell tenants – it’s the first time they appreciate it applies to them. Thus the challenge appears to be – getting the message out to them, as you can’t rely on the DWP.
Incentivisation schemes have been popular – way before the under-occupation changes were announced. As one landlord put it to me recently: “It’s not like we’ve left tenants to rattle around in mansions”. However, most landlords I’ve spoken to say their tenants “like where they live” and are prepared to “hang on”. This is represented by the fact that 40% of social tenants have lived at their current address for 10 years or more, according to estimates from the English Housing Survey for 2008/09.
Ross Macmillan is the deputy editor of 24housing magazine