Crunching the numbers

The votes are in: it looks increasingly likely that the bedroom tax is here to stay.

Social landlords are starting to crunch numbers on what the impact will be of the policy, which will see housing benefits cut for tenants with one or more spare rooms. The problem is expected to be particularly acute in the north of England, where there are simply not enough one and two bedroom homes to meet demand.

This was the topic of our Focus discussion this week, and Geraldine Howley kicked us off by crunching some numbers.

She is the chief executive of Incommunities, which lets 25,000 homes in Bradford. As the district’s largest social landlord, the association has identified 3,800 tenants who are under-occupying, and will have to pay extra if they want to stay in their current home.

But even if Incommunities stops letting the one and two-bed homes to new tenants, it will take more than two years to rehome all those who will have to pay the ‘bedroom tax’.

On our forum and on Twitter, where we continued the discussion, other landlords began to weigh in with their numbers.

Riverside Group, for example, has zoomed in to examine what the impact will be on under-occupiers in a single neighbourhood where they let out homes to 421 tenants, Tranmere and Rock Ferry

One in four will be affected by housing benefit cuts to under-occupiers of working age. The association has worked out that just under nine in 10 of these under-occupy by one bedroom.

It would take the association six years to move all the tenants who want to downsize into one-bedroom vacancies.

We also got sent this report by the Housing Futures Network, which looked at some other parts of the country. In Sunderland, it would take more than eight years to move under-occupiers into one-bedroom homes as they become vacant. The chances of this happening are slim. The report concludes: ‘It will therefore be impossible for many social landlords to offer most under-occupying tenants a chance to move anywhere smaller in the foreseeable future.’

So what will the impact be? In Riverside’s study, they calculate that underoccuping tenants may move into the private sector – and have the increase in rents covered by housing benefits – or if they stay in their homes, they will have to ‘cope with significantly reduced income levels - nearly 30 per cent of weekly disposable income in the case of a single person job seeker’.

It adds: ‘This will cause significant hardship for households already living in a low income community, with residents suggesting that harsh choices will have to be made between basic necessities and paying the rent’.

And lots of contributors on the forum pointed out the many practical barriers people face in moving house. For example, Steve Clarke, who is managing director of the Welsh Tenants Federation, talked about tenants getting caught in a Catch-22 situation where they are in too much debt and can’t afford to move:

‘One of the other major barriers is debt, if you have debt then you can’t move! so you’re under-occupied in debt, burning money on fuel and bedrooms you don’t need or indeed want.’

Now the bedroom tax is certainly on its way, more landlords – particularly those in the north of England without the stock to precisely meet housing need – will be making this type of calculation.