Friday, 01 August 2014

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.

Readers' comments (19)

  • Melvin Bone

    Sounds dodgy to me. But I suppose they can always reclassify them again later...

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  • better beware no one asks for a back date if the property should never have been charged as a three bed as this suggests. i think i would be asking the question if id paid £5 a week tooo much for ten years

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  • Progressive Solutions Required

    Well done for backing the customers against the government - now if only the continuing complicit landlords could do the same.

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  • the problem is though Chris that this 250,000 a year is three homes a year not being built in knowsley. insulating the customer is laudable but it is only at the expense of future tenants. what the funders make of the reduction in asset base value remains to be seen. i was not being entirely flippant with my post about a challenge to rent level either - given the pressure on council's this is entirely possible IMHO

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  • Riman10

    An interesting way of dealing with this. Perhaps having more information may enlighten the rest on the pros and cons of this move? For a start, what exactly constitutes a 'not using the extra rooms as bedrooms'?

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  • I would also worry that DWP may look for a backdate if these homes have wrongly received too much H/B over the years?
    We have recently heard that any discretionary payments to assist under-occupiers could be classed as income, and therefore counted within universal credit calculations. Landlords are trying to help but may not get it right. We need to campaign for change, not help to allow this charge to be brought in without protest and for the impact to be captured and publicised

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  • Peter Fish

    What does this mean for all the landlords who claimed this could not be done? Someone appears to have been dishonest - and it cannot be those landlords who are actually helping their tenants!

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  • patatwirra

    come on WPH, please do the same and put your tenants first

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  • Yes, I agree with P.A.W. - Wirral Partnership Homes...follow this excellent example. Be there when we need you and not merely for publicity about how celestially grand you are at public projects and having a social conscience. If you have any form of social conscience, GET US OUT OF THIS BEDROOM TAX NIGHTMARE!

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  • well perhaps they have assessed the likely cost of increased rent arrears and the cost associated with their attempted recovery - which may well be caused by the introduction of the new rules against the loss of rental income from redefining the size of their dwellings - if the risks are less for the reclassification route then it should also satisfy their lenders! Seems a sensible pragmatic approach to me.

    I suspect that reclassification will look at things like a three bed parlour house with two receptions which might be easily allocated as a 4 bed house being reclassified as a 3 bed even tho it can be used as a 4 and a close look at the square meterage of small box rooms - anything under 70sg feet I think it is is not actually a bedroom but is let and used and charged as one - reasonable then to redefine excluding it for under-occupancy purposes. These are not tricks or fiddles and should not be presented by the media as such - just joined up logical and sensitive consideration f the issues by forward thinking social landlords!

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