Wednesday, 29 March 2017

Providers report rise in voids as they struggle to let larger properties

Landlords could demolish bedroom-taxed homes

Social landlords have warned the bedroom tax could lead to the demolition of homes as larger properties become increasingly hard to let in some parts of England.

Wigan and Leigh Housing, which manages 22,576 homes on behalf of Wigan Council, is one of several landlords finding it harder to let properties due to the under-occupation penalty, which cuts housing benefit for social tenants with spare bedrooms.

The arm’s-length management organisation said it now has 17 vacancies in high-rise blocks because it is struggling to let two-bedroom flats because of the bedroom tax.

Ashley Crumbley, chief executive of Wigan and Leigh Housing, said the ALMO is considering a range of options for stock for which there is low demand.

These include redecorating to make homes more attractive, carrying out structural work to change the number of bedrooms or, in some cases, demolishing them and replacing them with different types of housing, such as older people’s housing or smaller properties.

Mr Crumbley said: ‘Demolition could only be justified if a trend had been established which we could not mitigate by other means.’

He said demolition would be considered where there is an ‘over-supply’ of hard to let, larger properties in the market. He added that the first demolitions would not take place for at least a year and that he expects numbers to be in the ‘low 10s’ in the early years.

Another landlord, north east-based Coast and Country Housing, also warned it may have to consider demolishing homes as a result of the bedroom tax. The 10,190-home association’s ‘ready to let’ empty homes have doubled from 43 in January to 85 in May, while voids would increase by 400 a year if the trend continues.

Iain Sim, chief executive of Coast and Country, said: ‘We are going to do everything we can [to let the properties] but there’s a limit on what we can do. I think, given time, demolition is certainly feasible.’

Mr Sim said there have been cases in the past few weeks of properties receiving no bids through choice-based lettings.

Other landlords, including Riverside and Fabrick, have reported some of their homes are taking longer to let and are looking at renting properties to different types of customers, such as people not on benefits. However they have ruled out demolition.

The north of England is disproportionately hit by the bedroom tax due to high numbers of family-sized properties in the region. A Department for Work and Pensions impact assessment published last June showed 240,000 of the expected 660,000 households affected by the bedroom tax are in the north, with 110,000 in the north west specifically.

Sue Ramsden, policy leader at the National Housing Federation, said the difficulties of letting stock and potential demolition are ‘a consequence of a very crude answer [the bedroom tax] that doesn’t take into account local housing markets’.

Chloe Fletcher, policy director at the National Federation of Arm’s-length Management Organisations, said in recent years landlords had dealt with low demand in different ways, including deliberately under-occupying properties. ‘The under-occupancy charge is making those lettings policies unworkable, so landlords have to go back to square one.’

The bedroom tax: in numbers

660,000
estimated households affected by the bedroom tax in England

240,000
households affected in northern England

£500 million
saving per year to the government by 2014/15

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