Friday, 27 March 2015

Decision will cost the organisation £250,000 in lost rental income

Tenants avoid bedroom tax after Knowsley reclassifies homes

Knowsley Housing Trust is reclassifying 566 properties as smaller homes, in a move which will help tenants affected by the bedroom tax.

The 14,000-home association is re-designating some of its two and three-bedroom homes as one and two-bedrooms respectively, which will cost it £250,000 in rental income per year.

Bob Taylor, chief executive of KHT, said a stock review showed some homes are currently classified as having more bedrooms than they actually have, because tenants are not using the extra rooms as bedrooms. They are therefore paying too much rent.

He said: ‘We wanted to look at all our properties and make sure every charge on them is the right rent.’

Mr Taylor said that reclassification would also exempt some people from the bedroom tax. However, he insisted KHT would have pressed ahead with the move even without welfare reforms.

Under the government’s bedroom tax policy, social housing households of working age with spare rooms will have their benefit cut from April.

The Department for Work and Pensions has left it to social landlords to decide what counts as a bedroom.

This led to speculation some landlords would look to reclassify homes.

However, an Inside Housing survey published last June revealed the majority of England’s largest social landlords do not plan to reclassify their stock due to concerns about reduced rental income and the impact on existing lending agreements.

A survey of more than 220 associations for the National Housing Federation last month showed just 11 per cent of landlords are likely to reclassify significant numbers of homes.

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