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Research findings on impact of bedroom tax 25/10/2013

BedroomTaxReport300New research by three housing bodies representing over 1.3m council households, has revealed rising numbers of tenants in arrears and a significant rise in the level of rent owed, since the introduction of the under occupation penalty.

The findings are the result of a joint research project from the National Federation of ALMOs (NFA), the Association of Retained Council Housing (ARCH) and the Councils with ALMOs Group (CWAG), into the impact of welfare reforms on council tenants.

In the three month period March to June 2013, the number of council households in arrears rose by 21 per cent, with the total monetary value of arrears rising by 16 per cent for the same period. Based on the trends identified by the survey this indicates that nationally local authority rent arrears rose by £17.5 million in the first 3 months after the implementation of the government's welfare reform agenda in social housing.

For households affected by the spare room subsidy the results were even more worrying - with an average of a 59 per cent increase in households deemed to be under occupying going into arrears. Particularly hardest hit are tenants and landlords in the North of England where the proportion of under occupying households in arrears, increased on average by 104%.

The research also found that 24 per cent of landlords had reported a rise in empty properties with the associated costs of dealing with these, and 42 per cent reported a drop in demand for some types of properties as households struggled to afford larger homes in some parts of the country.

Commenting on the report ARCH Policy Adviser, Matthew Warburton, said:


"The survey also confirms that most councils will not have enough smaller accommodation available in the coming year to enable more than a small proportion of affected tenants to downsize. This implies that arrears are likely to go on rising as tenants continue to struggle to pay."

NFA Policy Director, Chloe Fletcher, said:


"Given the rising cost of living, local authority spending cuts, and changes to the wider welfare benefits system, it isn't surprising that councils and ALMOs are finding it more difficult to collect rent. What is alarming is the speed by which households affected by the under-occupancy penalty have struggled to maintain rent payments and the scale of unintended consequences of the reforms for housing providers in some parts of the county."

The NFA, ARCH and CWAG will continue to capture data from its members over the year and will monitor and report the policy's continuing effect on tenants and landlords.


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Notes on the survey

The survey was sent to all NFA, CWAG and ARCH members in August 2013 and 28 ALMOs and 17 councils responded.

The NFA, ARCH and CWAG represent just over 1.3m council properties, 32 per cent of social housing in England. The organisations are supporting their members across England to minimise the impact of welfare reforms with a range of educational and financial measures introduced since April. 

The under-occupation penalty or spare room subsidy is a change to housing benefit entitlement introduced in April 2013 that means council residents receive less housing benefit if they live in a property that has one or more spare bedrooms. Tenants judged to have one spare bedroom will lose 14 percent of housing benefit and those with two or more spare bedrooms will lose 25 percent of entitlement.

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