The Department of Works and Pensions (DWP) housing benefit under-occupation rule will commence from Monday 1st April 2013. The change means that if there are social housing tenants under pension credit age currently 61 and 6 months and rising roughly 1 month every 3 months thereafter) that are under-occupying their homes, they will see a reduction in housing benefit entitlement by 14% for one bedroom and 25% for two bedrooms or more. The housing benefit change is predicted to impact on more than 40,000 social tenants here in Wales.
There are currently 75,000 tenants in arrears with some 5,400 more than 13 weeks, meaning their security of tenure is under significant risk. Undoubtedly more of the 75,000 will move into the high risk zone as a consequence. The measure is set to save the DWP and treasury 27 million. In the context of 80 billion tax fraud each year, the figure is almost insignificant. Many feel that it’s not about saving money, the measure was introduced to force the working classes out of affluent areas of London and the south east and back into the suburbs.
In England, coupled with the localism bill and changes to homelessness legislation, local authorities will be able to divest their responsibility of keeping people in temporary accommodation (if qualified), and ‘post them’ to private rented sector outside their borough or county boundaries. No doubt many council and housing association properties will become available for the more deserving, as social landlords will take advantage of the newly acquired ability to charge up to 80% market rents. Thankfully, we will not see this here in Wales?
While some will be able to fund the extra cost of meeting the reduction in contribution towards their rents via taking in lodgers, charging their siblings more, trying to find overtime or extra fixed hours, the reality is, that more will find it an increasing burden that they cannot cope with. The single change on under-occupation that tenants refer to as the ‘bedroom tax’ may not in itself have had such a profound impact, but coupled with job losses or restricted hours, and a plethora of other welfare reforms, not to mention the increasing cost of living at the sharp end of localised economies, for many, the burden may be too great.
We will undoubtedly see a decline in security of tenure, as more seeking possession notices will be served upon families, as landlords seek to respond to their escalating rent arrears with no doubt significant pressures from lenders. Once any transitional support ends, Wales will see more people become homeless.
Tenants in Wales have worked tirelessly to raise the profile of the debate seeking answers to how we can best help to mitigate the impending disaster that will befall many working and non working families. The Welsh Tenants have worked with a range of partners and tenant representative groups to ensure that landlords, tenants and stakeholders are informed of the need to be proactive and find a range of solutions. Debt management support alone will not suffice, if you have limited and finite resources, they simply mean making tougher choices about ‘what you need’ and ‘what you need’.
Many can find more lasting solutions by downsizing, but there are a range of barriers in place that we need to overcome:
• changing the mindset of landlords in relation to allocations, a ‘voluntary priority move-on’ to lower cost accommodation for those impacted by the changes. Compensating tenants for downsizing is something we can positively do, to make better use of the existing stock, after all, many loyal tenants have lived for decades in social housing as good tenants, they are prepared to free up their family home if there is an incentive for doing so.
• wider collaboration with other housing associations to offer a range of services to those impacted.
• Landlords are actively considering ending the moratorium on the use of ground 8 mandatory eviction, a power landlords can use if you have a consistent pattern of rent arrears and are more than 8 weeks in arrears at the time the notice was served. The non use of ground 8 is a long-standing moral commitment social landlords pontificate on, this differentiated themselves from private rented sector. Will the housing association movement continue to honour this when their tenants are facing financially crippling times?
• Tenants should consider legal action against landlords that fail to provide social tenants with their ‘right to exchange’, if they have rent arrears (75,000). We should contest that. If a tenancy exists, then the landlord has a statutory duty to honour the rights and obligations of that tenancy, just as the tenant has a continuing ‘right to repair’, they have a continuing ‘right to exchange’. Too many tenants have been denied this right at the convenience of the landlord.
• Tenants should consider contesting any DWP or landlord definition of what is indeed a ‘bedroom’. Properties have been let on a definition of bed space. A 3 bedroom 4 or 5 person dwelling let under a tenancy agreement cannot suddenly become a 3 bedroom 5 or 6 person dwelling. Particularly if the bedrooms do not meet the statutory defined space for a single bedroom as 110 Sqft as in House’s of Multiple Occupation regulations under the Local Government and Housing Act 2004. Many non-double bedrooms built under Tai Cymru’s pattern book are just 48 sq ft. It would be inhumane to put two 15 year olds studying in such a space. Yet the DWP guidance expects tenants to do just that. Many tenants in this situation are in fact barred from taking up the ‘lodging’ option as the room would not meet this size criteria, thereby denying those impacted to fair and equal consideration under the law to properties older and larger. The fire risk associated with such a decision would be of considerable concern to lenders. Insurance premiums are sure to rise considerably both for the landlord and the tenant. The Council of Mortgage Lenders doesn’t like the concept of re-designation (redefining the bedroom size of accommodation and thereby taking the hit themselves) because this would impact on the loan value, however they appear to be content that landlords considering changing properties termed ‘parlour properties’ (where they have two downstairs rooms) into four bedroom properties, by virtue that the room can now be let as a fourth bedroom or lodging.
• If 40,000 tenants decided to downsize to the private rented sector, then it would cost the DWP considerably more, as the rents chargeable for even one bedroom less are likely to be twice the housing benefit of a social housing property.
• Many tenants who have been accepted on the waiting list for a larger property are now having to be told they are suitably housed. Under what criteria? The regulations on size relate to the amount of housing benefit assistance one can claim, which has nothing whatsoever to do with the allocation of accommodation when let. Yet another opportunity for landlord litigation.
• Many landlords have failed to consult properly ‘as is their legal requirement’ when a change of housing management occurs. Particularly where there is a change to a tenancy agreement. Would every tenancy agreement have to be changed if suddenly the property is now defined as a different size than that originally allocated under the tenancy agreement?
• Many tenants may have been offered accommodation unsuitable for their needs (in terms of size) because hey are hard to let. Any tenant offered accommodation after the legislation was introduced would have a strong case against the landlord for being culpable in the accumulation of arrears as they have not advised the tenant appropriately. Could we see a raft of litigation on that basis post the introduction of the bedroom tax?
• What would happen if the Welsh government decided to take a tough stance on its lifetime home standards, and a raft of other legislation and define in statute (possibly building regulations) what is a suitably sized bedroom for a property, how would the DWP react then? Perhaps we need to think out of the box more and defeat this cruel and degrading measure.
• There are so many other potential challenges under the welfare reform act, that it could keep landlords and the DWP in the law courts for decades… we haven’t begun to tackle the vexed question of the restrictions on service charges and estate management and the impacts on the sustainability of social housing.
The sad point, is that the bedroom tax will hurt children more than adults, adults have the resilience to battle on in their childs interest. It is legislation against the child, not for the health and well-being of the child, which is a first in Britain’s long and proud democracy, the long-term impacts of which, are set to bare their scars for decades to come.