Council offers tenants £25,000 to downsize
A London local authority is offering tenants up to £25,000 to move to smaller properties to reduce overcrowding and the impact of the government’s ‘bedroom tax’.
Camden is prepared to pay £25,000 to tenants who move from a six bedroom home, £20,000 for those who downsize from a five bedroom home, and £15,000 for those who give up a four bedroom home.
The offer is designed to free-up large, under-occupied council properties to make way for families that are currently living in overcrowded conditions. Camden has more than 5,000 families in overcrowded conditions, and estimates around 60 per cent of its 1,380 properties with four or more bedrooms are under-occupied.
The move is also intended to limit the impact the government’s bedroom tax will have on tenants and the council.
The bedroom tax will cut housing benefit for working age tenants who receive the payments and are under-occupying from April next year. In Camden the cut will amount to a £21 a week reduction in benefit for those with one spare room, and £36 a week cut for those with two spare rooms in a four bedroom property.
The council estimates it will lose £2.5 million a year of income as a result of the cut if it cannot find alternative accommodation for the families that are affected.
Sarah Hayward, leader of Camden Council, said: ‘In the last year only one tenant chose to downsize their five-bed home, but we hope that our pilot scheme offering realistic cash and other incentives will now encourage more tenants to choose to do so.’
Other councils have offered similar incentive schemes, but Camden’s is one of the most generous announced so far. Earlier this year Richmond Council set aside £150,000 to encourage downsizing, offering tenants £2,500 for every bedroom they give up, to a maximum of £7,500.