The impact of bedroom tax and housing benefit reforms

by Paul Shamplina

20:06 PM, 18th June 2013
About 5 years ago

The impact of bedroom tax and housing benefit reforms

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The impact of bedroom tax and housing benefit reforms

The impact of bedroom tax and housing benefit reformsThe impact of the bedroom tax and reforms to housing benefit – has this led to more impoverished renters?

One of the greatest concerns for tenants with the reforms is being able to manage their finances from a weekly to monthly basis and having to deal with taking one, in many cases reduced, payment in place of the various benefits and tax-credits previously available.

As more tenants struggle with the new system, fewer landlords will feel confident enough to rent to this sector, creating an even greater gap between supply and demand of social housing.

Couple this with the impending bedroom-tax where some claimants will see their housing benefit portion reduced by up to 25% on the basis of under-occupancy and I think it is inevitable that landlords can expect shortfalls in rent.

The reality is that the whole system is in a sad state of affairs which is likely to lead to a greater number of impoverished tenants.

Paul Shamplina has over twenty years experience in the legal field, and as co-founder and director of Landlord Action, the market leaders and longest serving independent company specialising in fixed-fee tenant eviction and debt recovery, he has acquired a reputation as the landlord’s friend.

Since Landlord Action’s inception in 1999, Paul has helped to evict over 17,000 bad tenants and is the authority in this area.

Contact Landlord Action

Specialists in tenant eviction and debt collection. Regulated by The Law Society.



Comments

2:15 AM, 19th June 2013
About 5 years ago

Who cares about impoverished tenants; what about the impoverished LL!?
HB tenants will use LL for a free loan as they know it could take 9 months to evict them.
The logic of these benefit reductions is to cause HB tenants to exit expensive cities;
that is as it should be, we need inactive HB tenants to be economically cleansed to cheaper areas.
This will cause problems for LL in expensive areas.
They should start removing these tenants as they will be knocked by these tenants who will not pay rent and have nothing left of their other benefits after the benefit cap.
They will choose their fags and booze over paying rent and to hell with the consequences!!
LL have to work out for each of their tenanted properties if £500 pw would cover the monthly rent and whether a family in a 4 bed property would be prepared to live on £1000 pm if rent ws £1000 pm.
I doubt it and so the LL will be knocked!

Sam Cowen

16:57 PM, 19th June 2013
About 5 years ago

interesting piece and timely - I was asked to talk at the Chartered Institute of Housing today on the subject of the Bedroom Tax. To clarify, this only impacts directly tenants in Social housing in receipt of housing benefit. But as a result we may see more being pushed into the private sector (which will do nothing to bring down the housing benefit bill) or into arrears (which won't help the finances of the housing associations expected to provide more social housing to the needy). It may also have the effect of killing two birds with one stone - as single people on HB under 35 only get the room rate, and no longer qualify for a whole property, families and individuals with a spare room may choose to take in a lodger to mitigate the effects of the bedroom tax, and also help to provide much needed accommodation to those single people.

Unfortunately Paul Barrett's comments were not particularly helpful, nor did they shed a good light on the landlord community. There are plenty of landlords who'd like to provide rooms and homes for tenants in need, but unfortunately the system as it stands is not encouraging them to do so. Remember though, that 4/5 recipients of housing benefit is in work, not unemployed, and it's mainly through employers not paying a living wage that the government is forced to supplement their housing costs.

Paul's suggestion that clearing the poor out of cities will cause massive social upheaval and harm, and leave us with segregated communities with massively worse life expectations for those currently not wealthy enough to own their own homes. It will certainly make us all the poorer too. Is this the future you'd like to see in Britain?

17:10 PM, 19th June 2013
About 5 years ago

I thought the 'bedroom tax' only applied to Social Tenants and that the rent cap set under the LHA had been in existence for more than 2 years.
Surely private sector landlords have already been working with the lower HB limits for quite a while.
Admittedly the idea of some tenants being handed a months money and then distributing it appropriately is a bit scary but the current system has been horrendous from a money management point of view. Some income received weekly, some fortnightly, some monthly and some every 4 weeks.

17:24 PM, 19th June 2013
About 5 years ago

Jo; you are of course correct about BT only applying to social housing.
The benefit cap applies to ALL rental accommodation.
BT does NOT concern a private tenant but they will be massively affected by the benefit cap and so will the LL.
LL who receive more than £50 pw of HB will have big problems; those who receive less than £500 will have big problems.
How much is tenant with a family prepared to pay in rent if they are restricted in total benefit receipts to £2188.99 per month!?
I reckon these people will economically cleanse themselves to cheaper areas leaving LL with expensive former HB properties high and dry!

17:33 PM, 19th June 2013
About 5 years ago

There is NOTHING wrong with clearing the poor out of cities; they can always get a job and stay!!
No HB tenants will have to make the same choices as people NOT on HB have always had to make.
We had to move out of expensive cities and move to affordable areas and then COMMUTE!
Well NOW the HB claimants are having to do the same thing......................................................................................welcome to the real world!!!
These economically cleansed HB tenants can create communites where they go to..
The only reason they have the communities where they have been is because of benefits.
Well NOW benefits; just like wages are being reduced and they will have to live within their new means; and about time too.
Nobody is stopping these HB claimants getting jobs and if they have jobs but can't afford a city life...................tough; they'll have to move; just like I had to!!

Sam Cowen

10:04 AM, 20th June 2013
About 5 years ago

Just to reiterate - 4 out of 5 HB claimants HAVE jobs, they're just not PAID enough to live on - which is why they're being subsidized.

I find the talk of 'economic cleansing' very disturbing. Paris banlieues are the equivalent of what you're suggesting. One of London's strengths is that rich and poor live next door. In Paris, the poor are banished to the outer suburbs where they stew until they riot and set fire to cars - or is that ok because your car won't be parked anywhere near where they live?

17:12 PM, 20th June 2013
About 5 years ago

No all the poor will be sent up North so we won't have to concern ourselves with the likes of them in London.
Why do you seem to think that people who need HB to remain resident in cities should be kept in such style and yet I had to move out to a cheaper area as I didn't have an HB to support my lifestyle.
You might wish to live next to a HB claimants; I don't!!
I also don't want to pay for them.
As we have; to at least they should go to cheaper areas that they can afford.
People on benefit should be in the same position as non-HB claimants as far as where they choose to live caused by their domestic circumstances.
Get rid of them to cheaper areas and this will save govt fortunes in HB payments.
People who are not on benefit are forced by economic circumstances to economically self cleanse them selves from expensive areas; that is what I had to do!
Benefit claimants will now be subject to the same economic pressures.....................should have happened about 40 years ago.
At last they will be got rid of to cheaper areas.
We cannot have rich and poor people living cheek by jowl; the country cannot and does not want to afford it.
Of course it is a shame that our cities are becoming too expensive for poor tenants.
the solution is to build millions of subsidised accommodation..........................................they used to be called council housing!!
This will not and is NOT being done.
Unfortunately this means poorer people will have to move out irrespective of any social consequences.
Benefit claimants of all types will now be forced by economic imperatives to MOVE!
They should NOT be excluded from having to make the same domestic financial decisions as everyone else NOT on benefits.
I don't care if most of these claimants are working; they should still be subject to the same decision making process as non-benefit claimants.
To benefit claimants I say the gravy train is over................welcome to the real world which the rest of us have been inhabiting for over 40 years.


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