��Ī - land economy

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Areas of Britain most affected by ‘bedroom tax’ are hardest to downsize in, research finds

fpjl2 — Thu, 17 Dec 2015 11:38:30 +0000

Research commissioned by the Department of Work and Pensions (DWP) on the implementation and effects of housing benefit cuts for those working-age tenants judged to have ‘spare’ bedrooms in social housing has been released today.

Part of the Welfare Reform Act of 2012, the cuts in housing benefit – termed the Removal of Spare Room Subsidy (RSRS) by the DWP, and dubbed by some as the ‘Bedroom Tax’ – has proved divisive, leading to public protests throughout the country. The policy impacts on around half a million households in the UK.

The latest report is the second and final piece of research into the impact of the RSRS by ��Ī University’s Centre for Housing and Planning Research, in association with Ipsos Mori. Commissioning the research was a condition imposed by the House of Lords for passing the Welfare Reform bill. An interim report of ��Ī research was published by the DWP in July 2014.

The new report, which brings the analyses up to November 2014 to cover the first twenty months of RSRS implementation, shows a drop in affected households of 14.2% during that time – from 547,000 to 465,000 – with the greatest reduction in London.

Landlord surveys suggest that between policy enactment in April 2013 and autumn last year up to 45,000 had downsized within the social sector – no more than 8% of those affected by RSRS. A further 87,000 affected claimants were still seeking to downsize in November 2014.

‘High pressure’ areas such as London and the South East, where overcrowding is a major issue and space is a premium, have the lowest number of tenants affected by the RSRS and the highest rates of successful downsized rehousing.

Researchers say this is mainly down to the types of housing stock prevalent in these areas: more one-bed properties within local authorities, and more tenants available to swap with overcrowded families, which may ultimately have a ‘positive knock-on effect’ in such areas.

However, in much of the rest of the UK, particularly areas such as Wales and the North East of England where overcrowding is not such a problem, there is a gulf between the size of households and that of available social housing stock: a dearth of much needed one-bed properties and a surplus of three-bed properties, the hardest to let under the RSRS.

“While research found similar rates of registration for downsizing, it’s much harder for some tenants to downsize than for others,” said Anna Clarke, co-author of the report from ��Ī’s Department of Land Economy.

Under the RSRS, children under the age of ten are expected to share a room. Those of the same gender under 16 are also expected to share. Pensioners, however, the group most likely to ‘under-occupy’ according to research, are exempt from the cuts.

Clarke points out that to be correctly occupying a three-bed property, for example, a family would need three children or two different gendered children over ten.

“Rehousing would normally be within a local authority, so the problem is compounded in areas with limited types of property. Some areas have stock consisting largely of suburban council estates full of three-bed houses. Yet most people at the point of applying for housing are single, or young families with one or two small children, and so would be considered to be under-occupying a property that size,” Clarke said.

Many local authorities told researchers there are not enough one-bed properties for single people and childless couples who need a home, particularly now they are competing with downsizers since the RSRS. The research found that social landlords are often reluctant to put people into shared housing, seeing it as a retrograde step.

“There is not much hope of finding a smaller property,” one local advice agency told researchers. “This week there is one one-bedroom flat available on the CBL system, and there are 120 bids on it.”

Young people – particularly single young people – will struggle the most to access social housing as a result, says Clarke. She recently completed research for the charity Centrepoint showing that a quarter of 16-24 year olds in the UK have experienced ‘unsafe homelessness’, sleeping in cars and sofa-surfing as a result of having nowhere to go.

“Access to homes for young people is getting harder in every direction: the cost of owning, demands on private renting. The RSRS restrictions are another barrier,” said Clarke.

While the majority of households prioritise their rent and have budgeted for the RSRS, and the report suggests landlords have been largely successful in transitioning tenants, the evidence shows that many of those affected are struggling.

The research found that 76% of those still affected by the RSRS in 2014 reported cutting back on food, and 46% cutting back on energy use, in order to pay the shortfall. “That £60 a month I have to pay (RSRS) would cover food for two weeks or it would mean I could keep the house warm. It just feels like I’ve had two weeks of money taken off of me,” one affected tenant told researchers.

A quarter said they had to borrow money, mostly from friends and family, but at least 7% cited lenders such as payday loans. Around 40% of claimants reported currently being in arrears on their rent.

Some parents were forced to cut back on activities with their children, which they found upsetting. “I panic about struggling to pay for things… We don’t spend any money at Christmas,” said an affected claimant.

“The RSRS affects a third of working-age tenants on housing benefit – a tenth of the whole social sector. This is a huge amount of people affected compared to other welfare reforms such as the benefit cap, which – thus far – has been tiny in comparison,” said Clarke.

Local authorities have a resource to help those most in need, often in the form of one-off payments known as Discretionary Housing Payments (DHP). The Government made substantial increases to funding allocation to local authorities for DHP, and the researchers found that this mitigated some of the initial hardship during implementation of the RSRS, with 23% of those still affected in 2014 having received some form of DHP.

However, the future allocation of DHP beyond April 2016 is uncertain as yet, and many local authorities were concerned that, with pressure on finances, it would be reduced.

In Scotland, it’s a very different picture. The Scottish Parliament is strongly opposed to the RSRS, but currently lacks the power to opt out, so has topped up DHP funding to completely ameliorate the effects of the policy – indicating clearly to landlords that all tenant shortfalls are to be subsidised using DHPs.

Consequently, to all intents and purposes, the RSRS is not practically in effect in Scotland, says Clarke, although Scottish landlords still have to ensure that all tenants have the correct DHP paperwork.

One of the Government aims was to incentivise people to work through the RSRS, but researchers found no evidence of this. While a tiny percent – three percent overall – had found work, an almost equal amount had lost it. “Many said they were actively seeking work in response to the RSRS, but they don’t seem to be finding it,” said Clarke.

The researchers didn’t find much evidence of empty housing stock, as some had feared. While 42% of landlords reported difficulties in letting some properties because of the RSRS, Clarke says this would appear to translate to landlords looking harder for tenants – allocating larger properties to those in less urgent need of housing, or through websites and letting agents – as the overall proportion of vacant properties appears to have changed little.

Overall the research concludes that landlords have also been largely successful in transitioning people to the RSRS, the impact has been manageable and people prioritise their rent, says Clarke. But this comes at a cost to tenants.

“Landlords aren’t going bust. There aren’t great swathes of empty houses across England, or enormous rent arrears causing mass evictions. But that’s not the same as saying the impact for individual tenants is manageable, and the evidence is that many people are really struggling as a result of this policy,” said Clarke.

“Most people can’t downsize, or move away from families and schools, or suddenly find work after years of looking. So they just have to keep cutting back their spending. And people on benefits don’t have a lot of spare cash beyond paying for the essentials in life.”

Read the full report on the DWP's website here.

Research commissioned by government following housing benefit reforms finds increase in tenants self-selecting to downsize, but the areas hardest hit by reform are those least equipped with appropriate housing stock. Researchers found households increasingly cutting back on essentials such as food and heating to make up benefits shortfall.

Access to homes for young people is getting harder in every direction: the cost of owning, demands on private renting. The RSRS restrictions are another barrier

Anna Clarke

markus spiske

Newcastle - large housing estate

The text in this work is licensed under a Creative Commons Attribution 4.0 International License. For image use please see separate credits above.

Yes

Right to Buy could mean a loss of 75,000 low-cost homes and a higher Housing Benefit bill, according to new research

fpjl2 — Mon, 23 Nov 2015 11:45:22 +0000

The new analysis, recently published by the Joseph Rowntree Foundation (JRF) and conducted by researchers at the ��Ī Centre for Housing and Planning Research (CCHPR) in the Department of Land Economy, is the first to look at the impact of building replacements homes as shared ownership.

The report, Understanding the likely poverty impacts of the extension of Right to Buy to housing association tenants, estimates that there will be 75,000 fewer low-cost homes becoming available to let over the next 5 years if the homes built to replace those sold are available as shared ownership rather than as low-cost rentals.

Taking into account the incomes of social tenants, the affordability of homes and the take-up rate of Right to Buy (RTB) by council tenants, researchers predict that 128,000 Housing Association tenants are likely to buy their homes under RTB over the next 5 years – fewer than one in 10 of all tenants.

The research shows that there are currently around 180,000 housing association tenants who could afford to exercise their RTB. Around half of these will be required to pay higher rents under the Governments new Pay to Stay scheme, and the higher rents they will face are likely to encourage them to buy their homes if possible.

The policy will have a huge impact on people who need to access low cost rented homes in the future, say the JRF. Building replacement homes for sale as shared ownership will mean that people seeking a social rented home will be pushed into the bottom end of the private rented sector, where homes are typically more expensive, less secure and in worse condition than Housing Association homes. The report finds that over the next five years if replacement homes are built for sale:

62,000 tenants will have to find an average of £1,668 extra a year to pay private rent. Around a third of these households are paying their rent themselves from their generally low earnings.
The other two thirds are in receipt of housing benefit, meaning that £31 million will be added onto the housing benefit bill as more people who claim housing benefit are pushed into the more expensive private rented sector or remain longer in homeless accommodation.
Just three percent of new social tenants could afford to buy the replacement properties if they were available as shared ownership.

In contrast, if the homes are built back at the same rent levels as those lost, there is only a temporary loss of lettings – caused by the delay whilst replacement housing is built. Under this scenario the estimated housing benefit costs of the policy fall to around £16 million and the increase numbers renting privately or in homeless accommodation is close to zero by the end of five years. The number of available lettings will increase after five years as new rented homes continue to be built.

The replacement homes will be funded by the sale of high-value council homes, likely to be classified as homes that are valued in the top third regionally. Local Authorities have different proportions of high value housing stock, meaning that some face losing a large amount of their social housing, while others will be forced to sell very little, or own none to start with. The five worst affected areas are all in the London commuter belt, and face losing more than half of all their low-cost lettings.

“The research has shown that the rent level of replacement stock is critical. Replacement homes for sale or shared ownership will not be affordable to those seeking social rented housing,” said Anna Clarke, Senior Research Associate at CCHPR.

“Replacement on a like-for-like basis could have a positive impact on the availability of social lettings, over the next five to ten years, though in the long term the subsidy for Right-to-Buy discounts cannot forever be found by selling off high value council stock without continually stretching the definition of high value,” she said.

Julia Unwin, Chief Executive of the JRF, said that this research shows how important it is to keep up the numbers of genuinely affordable rented homes.

“To make sure that this policy doesn’t drive up poverty in the long term, the Government must ensure that every low-rent home sold is replaced by another of the same tenure, same cost and same locality,” said Unwin.

Adapted from a Joseph Rowntree Foundation press release.

Replacing housing association homes sold under the new Right to Buy scheme with those for sale could drive up costs for low-income tenants and the taxpayer, according to a new report.

The research has shown that the rent level of replacement stock is critical. Replacement homes for sale or shared ownership will not be affordable to those seeking social rented housing

Anna Clarke

Ben Salter

New houses pile up at Fontagarry