The new bedroom tax which came into force on 1st April 2013 is having a devastating effect on single people and families. The new rules mean that for those living in social housing who have 1 spare bedroom, their Housing Benefit will be reduced by 14%. A 25% reduction will apply for those with 2 spare bedrooms. The changes mean that already people are struggling to pay the shortfall and are finding themselves falling into arrears with their landlord.
Helena Partnerships are a large social landlord in the North West. In 2011/2012 the average rent on a Helena property in the St Helens area was £80.65 per week. Based on these figures a 25% shortfall would be £20.16 per week. A single person over 25 and in receipt of Job Seekers Allowance will only receive a maximum of £71.70 per week, leaving them with just over £50 per week to pay for food, gas, electricity, water, telephone, travel, council tax etc. When the cold winter months bite it will be particularly hard to make ends meet, if not impossible.
We are seeing a big increase in the number of possession cases and warrants of eviction being issued at Court. Traditionally social housing stock is made up of larger 3 or 4 bedroom properties and people who have lived in these properties for years and raised their children there are now facing the prospect of leaving their family home as they can no longer afford to stay.
You only have to look at the tragic case of Stephanie Bottrill in Solihull who took her own life rather than face the prospect of leaving her family home and the dreadful impact the bedroom tax is having on people is clear.
Younger people who have left the family home to start their own families and gain independence are having to move back in with their parents. At the other end of the scale, single people and couples whose families have grown up and moved out are finding themselves in large properties which they can’t afford to keep. But where else can they go?
With so many people in similar circumstances the demand for smaller social housing properties is rapidly increasing. People can register with their local authority and housing associations to look for alternative accommodation but there is a huge waiting list. And the hurdles keep coming because if they fall into arrears it is highly likely that they will either be excluded from the register or their priority will be reduced making them much less likely to be successful in bidding. Many social landlords also have mutual exchange policies where tenants can swap properties, but again they are unlikely to be considered for a transfer if they are in arrears. And to make matters worse, the properties available for exchange will mostly be larger 3 and 4 bedroom homes, which people are trying to downsize out of!
The other option is to look for accommodation in the private sector but the Local Housing Allowance benefit is also likely to leave tenants with a large shortfall to make up. In the Wigan area, a couple with two children under 10 will receive a maximum of £94.34 per week. On a monthly rent of £475, this will leave a shortfall of £66.11 every month
Tenants, whether in social or private rented accommodation, can apply to the local authority for a Discretionary Housing Payment to help top up the shortfall in benefit. This can be done by downloading a form from the local council's website or collecting one from the Housing Benefit office. The fund for these payments is limited, and demand is extremely high. It has been reported that Liverpool Council received 1,265 applications in April 2013 compared to 138 in a typical month. Anyone who may benefit should apply as soon as possible before their local authority's budget runs out.
Ultimately, there are going to be more and more people falling into arrears and receiving court papers from their landlord. Often when those papers are received, tenants will contact the housing officer to try to sort out arrangements for repaying the arrears and will be desperate to do whatever they can to stay in their home.
However, without legal advice, it is likely that tenants will agree to something more restrictive than a Court would order them to pay. We also find that many people will agree to a Suspended Possession Order being made, which means that if they fail to keep up with the payments under the Order, the landlord can straight away apply for a Warrant of Eviction and a date for the bailiffs to attend to change the locks. A better outcome in many cases is for the court proceedings to be adjourned and this way if there are further problems (often out of the tenants control such as benefits being delayed), the landlord will have to bring the case back to Court for another hearing before they can obtain a Possession Order. The key is therefore to seek legal advice as soon as you receive any notice requiring you to move out of the property or any Court papers for possession proceedings.
The new bedroom tax is being applied to the lowest income families and in many cases tenants simply can't afford the shortfall. The changes are supposed to reduce local authority spending but in fact will end up costing more. Many local councils and housing authorities will see the level of arrears owed to them sharply rise. There will be increased legal fees in bringing and defending the possession claims and more of a burden placed on local authorities when those people who are evicted become homeless and turn to them for help. The local authority should accept a duty to re-house those who are considered to be in priority need (such as those who are vulnerable as a result of disability or who have dependent children) and have lost their properties through no fault of their own due to them being unaffordable. The council will then no doubt re-house these people back into local authority accommodation. In all likelihood they will end up back in the larger properties which will be standing empty and the whole process will repeat again!
The bedroom tax has already brought much distress and worry to many tenants as they struggle to make ends meet and the situation is only likely to get worse in the future.