Bedroom Tax – If KHT can do it, why can’t my landlord?

If KHT can do it why can’t my landlord?

That is the question tenants are asking and will increasingly ask – if one social landlord (KHT) can reclassify a 3 bed property as a 2 bed property and hence tenants avoid the bedroom tax then why can’t my landlord?

Knowsley Housing Trust (KHT) have opened Pandora’s Box in simple terms.

I commented on the KHT policy a few days ago when it was announced and said what interested me was the fact by reclassifying down they reduce their exposure to arrears as the gap between a 3 bed and a 2 bed rent level was £8.47 per week and lower than the £11.69 bedrom tax deduction and bedroom tax risk to arrears.

Before I discuss this further it is worth noting that the 566 properties KHT downsized in rent terms represents just 4% of the 14000 or so social housing properties it has.  That point is important as it reveals KHT has only done this on one in 25 of its properties yet nationally if there are 660,000 bedroom tax affected properties out of 3.8 total properties then over 17% of all social housing properties are affected by the bedroom tax.  So the KHT example is perhaps just one in 4 of those affected and even that presumes Knowsley doesn’t have a higher percentage since we are told – though figures are hard to pin down – that ‘the North’ can have up to 40% of its properties affected.  So the KHT example could be as little as one in ten and still leave 9 out of 10 tenants still affected by the bedroom tax!

KHT has said this reclassification was happening anyway and that must hold for me and this is not a contrived way of reducing housing size for tenants to avoid the bedroom tax.  So tenants shouldn’t get their hope up.  Yet the social tenant will still say if KHT can do it why can’t my landlord!

This is incredibly important for social landlords for a number of reasons.  I have argued for a log time that some tenants will and do perceive that social landlords are complicit in the bedroom tax.  It doesn’t matter whether that is right or wrong – what matters is the perception.  If a tenant believes it to be true is what matters.

The simple reason for this is what will likely happen when the little discussed issue of tenants receiving HB directly happens – the direct payments issue - rather than the situation now when HB goes direct to the social landlord.  IF a tenant sees their landlord as complicit in the bedroom tax (rightly or wrongly) they will not prioritise their rent payments and the social landlord will suffer an increase in arrears and financially they are extremely worried.

Complicit here means many things.  It doesn’t just mean the tenant sees the landlord informing HB that a property is a 3 bed when in reality and in law(?) it is a 2 bed and a boxroom.  I use it here to mean tenant dissatisfaction with their landlord appearing not to be challenging the bedroom tax or even only coming out and challenging it after a sit-in as many see the events of Liverpool Mutual Homes (LMH) last week.

About a year ago I applauded Riverside ECHG (RECHG) for sticking their head above the parapet and challenging the entire welfare reform agenda in a public arena.  Wigan and Leigh Housing (WALH) deserve huge credit for making the argument that the bedroom tax downsizing agenda will cost more to the public purse.  There are other landlords who have gone public with dissent over the bedroom tax…and also others I am aware of who have not gone public but done some fabulous work with tenants over these issues.  Yet they may simply be caught in a general social tenant mood of my landlord hasn’t and didn’t do enough to challenge the bedroom tax.

I can also foresee tenants unwittingly falling into arrears too by paying 4 weeks rent when they receive their monthly Universal Credit.  This will see arrears of more than a week ever year so even if ‘complicity’ is not perceived by the tenant direct payments will create a huge arrears problem.

Social landlords have been shafted by the government in these welfare reforms too as they have been placed, and deliberately so, between a rock and a hard place by the coalition.  The guidance issued by central government to each local council specifically places the onus on social landlords to confirm to the council that the property is a 3 bed and not a 2 bed + boxroom.  This guidance the A4/2012 says:

Bedroom size

We will not be defining what we mean by a bedroom in legislation and there is no definition of a minimum bedroom size set out in regulations. It will be up to the landlord to accurately describe the property in line with the actual rent charged.

It will be up to the landlord exposes the risk and its a huge risk of the social tenant perceiving the social landlord to be ‘complicit’ in the bedroom tax process. So it is ‘fair’ (a word bandied about in the bedroom tax debate and so often falsely but not here) to say that the social landlord has been shafted by the bedroom tax too.

Yet it doesn’t excuse the social landlord from not highlighting this key issue and seeing the risk it poses.  It doesn’t excuse the social landlord from not speaking out in public.  It doesn’t excuse the social landlord from not challenging the bedroom tax and I think legally too.  This is not about being placed in an invidious position but about a social landlord confirming a property is a 3 bed property when the smaller bedroom measures 9ft by 7ft and doesn’t meet the room size standard.  I know of an actual case where the landlord is renting a “3 bed” property which is just 7ft by 7ft and 49 square feet and below the absolute minimum of 50 square feet to call any room a bedroom.

The argument here is what legal exposure do social landlords expose themselves to if they tell the council its a 3 bed property when in fact it is just a 2 bed.  That is exactly what the bedroom tax process involves.

Yet go back to the official guidance above and change the emphasis “It will be up to the landlord to accurately describe the property in line with the actual rent charged.”

Accurately?  The alleged 3 bed property that has the smallest ‘bedroom’ at 9ft x 7ft is 0.9 of a bedroom and so ACCURATELY the property rented is a 2.9 bed property.  As I have said before this is extremely important when you like at the official guidance in the A4/2012 which says:

Rates of reduction. Those that are considered to be under-occupying their accommodation will see a reduction in their housing benefit calculated by a reduction of:

  • 14% of the total eligible rent for under-occupation by one bedroom; and
  • 25% of the total eligible rent for under-occupation by two bedrooms or more.

Note well the policy says one – that is 1.0 – BEDROOM and not one room.  The significance of ACCURATELY describing a property as 2.9 bedrooms becomes very apparent as many social tenants will avoid the bedroom tax and in fact up to 81% of them will not face the bedroom tax IF their smallest ‘bedroom’ is in fact accurately described as 0.9 of a bedroom.

ACCURATELY & FAIRLY? It is not just accuracy that it an issue here it is fairness – and I mean fairness in terms of being equitable and comparing directly with the private rented sector which is something the coalition state is what they are doing with the bedroom tax – placing social housing in HB terms on a level playing field with private housing.  Yet over the weekend we had the Govan Law Centre issue which exposed that after seeking legal opinion that the social tenant will be less favourably treated than the private tenant in determining what is a bedroom.

The counsel opinion looked at the Rent Officer Handbook – in simple terms what the independent Rent Officer uses as a bible to determine the what is a bedroom question for private tenants claiming housing benefit.

Yet the Rent Officer Handbook continues: -

Under the Housing Benefit Scheme, rent officers treat bedrooms and rooms suitable for living interchangeably, Local Reference Rents are based on total number of habitable rooms (bedrooms and living rooms, but including dining rooms, some conservatories and living kitchens. Under the Local Housing Allowance Scheme, the LHA is based on numbers of bedrooms alone. Therefore it will be vital when collecting lettings information to understand precisely how the property is being let to ensure the lettings information is used correctly and not to distort the LHA.

The above has huge significance in the bedroom tax debate. The closest thing we have to a legal definition of what is or is not a bedroom states clearly that there is a key difference between how rooms are viewed for social housing (Housing Benefit) purposes and for private rented housing (LHA) purposes!

I discuss in the above the classic situation that the general public has become aware of in recent weeks through the ‘human interest’ stories that have appeared on the national TV news.  The disabled tenant in social housing and the social landlord has fitted a through-floor lift which takes up so much space in the upstairs ‘bedroom’ that you can’t sleep in it.  The Rent Officer in assessing a private rented property would CORRECTLY state this upstairs room is NOT a bedroom; yet in social housing it would be considered a bedroom and thus render the tenant liable for bedroom tax.

That is simply unfair and a de facto case of discrimination.

I cannot imagine any right-minded person in the country seeing that as being fair or equitable and I include the most die-hard right-winger. Yet is also means the social landlord needs to be lobbying this type of case and sticking their head above the parapet on it as if they don’t do this they WILL be perceived as being complicit.

Of course it also means the Labour Party has to raise this issue too and it hasn’t been raised (and that’s not a pun on the through-floor lift!)  It also means disability groups have to raise this issue too and replicate the achievements of the Spartacus report.  It also means the whole bedroom tax policy has to be fundamentally re-considered and at worst deferred and preferably abandoned.  Yet while the social landlord – who should be seen as the expert here – dithers and doesn’t raise massive public awareness of this and other bedroom tax issues, including exposing the myth that the bedroom tax merely places the social tenant on the same equal footing as the private tenant, the social tenant will perhaps correctly see this as complicity!

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12 thoughts on “Bedroom Tax – If KHT can do it, why can’t my landlord?

  1. Elaine Willis February 19, 2013 at 4:24 pm Reply

    i so agree that the size of the said bedrooms are important , my arguement is actually on the otherside my daughter has a 2 bedroom flat and one off the bedrooms is 63sqft and she has been told she has to put her 3 children in there as she is not overcrowded as the children are under 10 , she has to put 2 single beds and a cot in there you cant fit a double bed in there so they cant swop !

  2. Phil McKuhen February 19, 2013 at 5:42 pm Reply

    An excellent piece, The issue is that it does not level the paying field with private sector has been missed. If all affected by this move to private landlords, I would love to see an estimate of effect on the HB bill. The problem is now, as with most people in the civil service, social landlords will not speak up and opposed as they just protect their own jobs. May be this time the issue is too serious for social landlords not to speak up. And as I have said elsewhere well done KHT at least trying something.

  3. Simone Hutchinson February 19, 2013 at 8:34 pm Reply

    Interesting blog – thanks for researching the data and publishing it. There’s a piece in The Herald in Scotland about legal advice being sought about the definition of a bedroom (See: http://www.heraldscotland.com/news/home-news/100000-scots-to-cash-in-on-bedroom-tax-loophole.20243112). If a housing association declared a property with one bedroom, one living room, one kitchen , one bathroom and one study as being a two bedroom property for the purposes of the housing benefit tax, would that mean that tenants are basically being told – implicitly – that they are not allowed the luxury of a study? Other uses of a ‘spare’ room could arouse the same ethical problem. This is just one more problem with this proposed policy. If the government wants to reduce the HB budget, then why aren’t they tackling private rents? Or the housing shortage? I can’t find any discussion about these latter two points… do you know anything about it?

  4. Simone Hutchinson February 19, 2013 at 8:38 pm Reply

    PS – I dare to be bolder about my point above: are social tenants being reduced (and restricted – disciplined even) to their basic bodily functions? No study/workroom/playroom/carer’s room et al allowed for social tenants…

  5. Kenny SantaTiger Patterson February 19, 2013 at 11:28 pm Reply

    I have been thinking things through about my own position and how this bedroom tax is going to affect me and as a result have noticed some contradictions
    Firstly I will outline my position and why there are contradictions
    I am a single male with staying access to my 2 children ages 6 and 14. I have a 3.bed council house.
    Because of my situation once this tax comes in I will have to pay 25% for 2 extra bedrooms. The government want me to move into a smaller home but I cannot move into a smaller home. Why? Well because of my tenancy agreement and the common allocation policy of my housing authority. I am only allowed a 3.bed property due to my circumstances. I cannot move to a smaller property because then I would be overcrowded according to the allocation policy.
    In order for me to be able to move from what the council deem I require (bedrooms) to what the government say I require the council will have to change the allocation policy! No problem with that is there? Well in order to change the allocation policy the council must consult with all tenants, the key word here is “all”. All tenants would have to agree and consent to a change in the allocation policy!
    So now everybody on the waiting list all future tenants and all existing tenants will be hit by this bedroom tax! Anybody wanting to move even if they work will be restricted by the same rules governing bedroom tax ie: if I was working and living in my 3.bed house but wanted to move closer to my work or kids then I would only be entitled to 1 bedroom even though I am working!
    This is just my example but looking through my allocation policy I can see the same argument for changing the allocation policy for disabled people etc etc.
    I have asked myself how many working people are going to agree to a change which would put them at a disadvantage if they ever wanted to move or where unable to work! Not many I would think.
    As a tenancy agreement and the allocation policy are legally binding contracts then this leaves the housing authority’s in deep dodo! The way I see it they are either going to reclassify how many bedrooms people have or take the loss themselves.
    What if they try to get round the lettings policy by bringing in different rules for those on benefits? Again this will never be allowed. For the above reasons and because what would happen if someone was in work the n out of work then in work again….. their bedroom entitlement would change each and every time forcing the council to re-home them each and every time!
    Good luck with your fight and hope this gives food for thought for the legally minded any comments as I am a layman would be appreciated
    Kenny

  6. Kenny SantaTiger Patterson February 19, 2013 at 11:30 pm Reply

    P.S. Just as an add on… if you are a social tenant with a RSL housing association then you are in the same boat! (RSL= registered social landlord, most housing associations are registered!) They have to follow the same allocation policy as council tenants!

  7. Time Lord February 20, 2013 at 5:02 pm Reply

    you say there is no clear deffinition of what is a bedroom …..i saw this on another blogg The 1985 Housing Act section 326 (see here) says: -

    TABLE II

    Floor area of room Number of persons

    110 sq. ft. or more = 2 persons

    90 sq. ft. or more but less than 110 sq. ft. = 1.5 persons

    70 sq. ft. or more but less than 90 sq. ft. = 1 person

    50 sq. ft. or more but less than 70 sq. ft. = 0.5 a person
    so according to this if your smallest room is 50sq.ft- 70sq.ft then clearly if your house is classified as a 3 bedroom you can ask it to be reassessed and classed as a 2.5 bedroom therefor you will not be charge. the bedroom tax law says 1.0 bedroom

    • joehalewood February 20, 2013 at 7:14 pm Reply

      No. I say others have said there is no clear definition of what is a bedroom and I use the same 1985 Act to say that there is

  8. Time Lord February 20, 2013 at 5:10 pm Reply

    i am with a private landlord and my house was reclassified last year as a 2 bed because the 3rd is under size and cann not be classified as 1 bedroom

  9. [...] why if one social landlord can reclassify a three bed property as a two bed property and hence ensure tenants avoid the bedroom tax, then why can’t other landlords? Next he pointed out the gender consequences of the bedroom tax [...]

  10. Julie Hover April 20, 2013 at 10:47 am Reply

    Can a council let a 2bed as 3bed

  11. Sandy Beeches May 4, 2013 at 8:49 am Reply

    there is no legal definition of a bedroom, so this story is slightly misleading. as there is no legal definition of a bedroom, there is also no legal size that a bedroom should be. i know for a fact, that Colchester Borough Council, have 3 bedroom houses with the smallest room being just 7ft by 5 ft. there used to be a law that did define bedroom sizes because many landlords were using “box rooms” as bedrooms but local authorities complained that there were thousands of council houses all over Britain, that didn’t qualify as bedrooms and that these properties would have to be downgraded to 2 or 3 bedroom houses, taking thousands of homes away from families that were already living in them, as the new law meant that they were overcrowding and would have to move. the law was repealed and instead, it was left up to landlords to determine what was or was not a bedroom. the only law that remains, is that all bedrooms must have a window on the outside wall of the house, as a means of fire escape. legally, all council o private landlords could reclassify there housing stock and nobody would be required to pay bedroom tax. it would be especially easy for landlords who changed the use of the dining room into a bedroom or have what would be called box rooms by most of us. my own dad lives in a 2 bedroom council house in Colchester but the house used to be a 2 up, 2 down. an extension was placed on the back, housing a bath and sink upstairs and a toilet downstairs. the “bathroom” is accessed through the second bedroom, which is 8ft by 5ft due to a huge chimney that takes up 2 thirds of one wall. they could easily reclassify it as a one bed, especially as he didn’t ask for it, they gave it to him because no single parents or couples wanted it.

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