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:
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!