The simple question ‘what is a bedroom’ has caused a bit of a kerfuffle and especially because of the basic issue of how can you tax something you can’t and indeed won’t define which is at the heart of the bedroom tax and is the coalitions stated position.
Yet the answer is nobody can say what a bedroom is – and yes that seems weird just typing those words as I know what I mean by a bedroom as does everyone in lay terms. But in legal and regulatory terms such as Housing Benefit which also means welfare benefit and welfare spending terms which also means public purse and taxpayer terms we can’t define it.
I could elaborate on that surreal path as that is what taxing something you can’t define is – totally surreal – yet ‘what is a bedroom’ has huge impacts in housing and welfare and legal terms as well as in landlord and tenant terms…and house buying terms too and in attempting to answer it we could uncover a much bigger mis-selling scandal than the banks PPI insurance and pensions charades. (If you have rent or have bought and pay for a purported 3 bed property which in fact is only a 2 bed….)
A ‘bedroom’ is defined by its size under existing regulation for Houses in Multiple Occupation (HMO) so that a single bedroom has to be a minimum size of 70 square feet and a double bedroom to be a minimum 110 square feet. So 70 /110 square feet become the minimum bedroom size or MBS. These MBS apply to asylum seekers and contracted that way between central government and local government under the asylum seeker dispersal programme which saw all areas of the country share the burden of costs that London and Dover were incurring. The same HMO regulations apply to DV refuges, homeless hostels for single persons and families and other multiple occupancy properties and so they are currently used for HB purposes and the MBS of 70/110 square feet do define what a bedroom is and do so by a minimum size.
So we have a legal definition and an operational one that links the payment of Housing Benefit to bedroom size. These examples also mean the decision rests with local councils and their HB departments and that local councils have existing powers to link the payment of Housing Benefit to MBS.
On an operational level and within housing 3 bed properties that have two double rooms and a single for example are known as 3 bed/5 properties. The 3 beds accommodate 5 persons just as a 3 bed/6 can accommodate two persons per room or 6 in total. So we see rented housing determines occupancy – which is at the heart of the bedroom tax – and allocation policies based on (perceived) bedroom size by the landlord.
Yet all we have in single household properties (that is not HMOs) is a landlord’s word and subjective opinion for the bedroom size being adequate and conforming to their definition of what is a bedroom. That can’t hold as any landlord could claim to be renting a 5 bed property which is only a 3
The private landlord in the Reigate case who rented a room of just 55 square feet and was rightfully and successfully prosecuted for renting a room that doesn’t conform to the HMO definition of a bedroom as it is too small can’t be the exception and not the rule for ALL rented properties. That can’t be right can it? How can we have ‘laws’ to protect individuals in a multiple household occupation setting that don’t apply to the vast majority of rented properties. Put another way what is to stop a social landlord from sub-dividing two large double bedrooms into two smaller ones and claiming the property is no longer a 3 bed/5 but is a 5 bed/9 and charging a much higher rent? If you don’t define a bedroom then that is possible. The public purse and taxpayer could be paying much more (and below shows this to be 75% more!!) for the same property than they are now!
Do we really want a housing policy which crams in as many people as possible into a house? Of course not in moral terms or in economic ones as that creates added costs and reduces educational attainment and extra costs to the public purse. Yet unless we define what is a bedroom in terms of size that can happen.
Without making any moral or political presumptions here a 3 bed property could be converted into a 4 bed property and a higher rent charged without much cost to the landlord. Given the official VOA figures show the average 3 bed private rental in England is £765pcm yet the average 4 bed rental is £1,337 pcm there is a huge difference of £6,864 per year in rental income. So even if it cost the landlord £10k to covert a 3 bed /5 into a 4 bed/5 then the payback time is less than 18 months!
If you were a private landlord reader and your properties are your business of course this is what you would do. Even the (full or part) benefit tenant in London would see their maximum LHA go from £340pw to £400pw – an increase of £3120 per year that the state and taxpayer would pay.
Again without defining what is a bedroom in single occupancy properties and having MBS this is possible, and even probable.
If you think that is improbable look again at a comment I received on the original post. It said “My “second bedroom” is 8 feet by 10 foot” and that is classed as a double room. If the largest bedroom is 16 feet by 10 feet and in many older properties this is not unusual, then partition it to make two 10 by 8 ‘double bedrooms’ and reap the higher rent! What I am saying here is that the bedroom tax policy without a MBS and without that being tied to the payment of housing benefit is economically irrational for the coalition. Whether that makes the bedroom tax legally irrational is not for me to say however it could easily end up costing the government (and the public purse taxpayer) so much more and not save a penny.
So we see the bedroom tax is perverse for government without a minimum bedroom size definition.
The bedroom tax is a claimed way for the coalition to save money yet the minute I post this, private landlords could and will be giving my example above strong consideration as the finances stack up. There is nothing to stop social landlords doing the same I must add.
The bedroom tax by looking at the MBS issue in single occupancy properties creates an economic imperative for the government to adopt a MBS.
If this is not looked at then the coalition could be spending 75% more in housing benefit!
Now where have we read this before? Yes the overall benefit cap (OBC) which limits total benefits paid to £500pw or £350pw for a single household. This was due to roll out nationally in April 2013 but is now just being rolled out in 4 pilot areas of the capital in April with a view to a national roll out sometime ‘in the summer’ – and yes official policy is as vague as that.
Why is the OBC being delayed?
The only absolute is that any delay in the OBC, which the coalition claim will save money, is that any savings are delayed.
Yet given the coalition have (a) a strong welfare benefit saving rationale and (b) that ‘direct payment’ to tenants has a pilot but is not being delayed in its roll out, then the only logical answer is that the coalition must have some doubts that the OBC will actually save money. And this is where the leaked ‘Pickles Letter’ becomes important.
The ‘Pickles Letter’ was a letter leaked in full in July 2011 from Eric Pickles PPS to David Cameron’s PPS which said that the OBC would cost more than it saved and part of my basis that the OBC will cost far more than it could ever save and create additional tens if not hundreds of thousands of families in the first year to become homeless too. Add to that the systemic flaw theory I developed which shows that this situation will get worse each year as rents rise faster than the cap and there is simply no chance the OBC will save public monies at all.
This is why looking at the irrationality of the Bedroom Tax and casting doubt on its claimed savings is an important route of challenge. Simply, if the OBC can be delayed and claimed savings foregone by this coalition because the OBC doesn’t stack up financially, then if the Bedroom Tax is shown not to stack up a similar delay will ensue and thus buy time to look at the legal ‘definition’ of a bedroom and the legality of a tax on something that is undefined.
For the avoidance of any doubt I am not suggesting that my large number of posts on the OBC and why it will cost more has caused this delay and change by the coalition. Or my many posts on why the banning of HB to the under 25s was never going to happen seen that issue die a slow death. And while it’s true to say that social landlords did overly focus on the bedroom tax and play down the OBC risk to them until recently, the central issue to all of these delays and abandonments is a common one – the bottom line. When challenges be they legal or lobbying are taken which question the bottom line or claimed economic rationale they have a better chance of succeeding.
Just as I said the bedroom tax should not be viewed on emotive grounds and instead looked at on legal grounds, ie is it lawful? Then it also needs to be challenged on its economic basis, i.e. will it save money? The ‘bottom line’ arguments are vital in any challenge to any authority local or central with a controversial decision. Yet the claimed financial savings of the bedroom tax have never been challenged as I have simply done so above.
Perhaps that’s because the targets of the bedroom tax are social tenants yet the ones who could and will take advantage of the lack of a MBS are private landlords.
I will be generous to the coalition and say that the partitioning of rooms scenario I outline above to generate additional benefit income is an unforeseen consequence of the bedroom tax. If as I argued yesterday the social tenant lobbies have done next to nothing on challenging the legality of the bedroom tax, then the total lack of any private tenant lobbies is very much at play here. There aren’t any private tenant lobbies to challenge this consequence of the bedroom tax for private tenants, they simply don’t exist!
Yet because the private rented sector (PRS) now accommodates as many tenants if not more than the social rented sector (SRS) this represents a chronic absence of a voice for private tenants. It also means that 20 years ago when 75 or 80% of tenants were social tenants but now at most 50% are, that tenant voices in the entire rented market have reduced massively. The average tenant has far less influence and say in simple terms…and how convenient that is for the government!
It is fair to say that traditionally the power lobbies have been social landlords and social tenant lobby groups. Yet that is clearly diminishing and obvious. Yet how many social landlords restrict their thinking to social landlord and social tenant issues alone and have failed to adapt this obvious factor? Oh yes the bedroom tax is all about social tenants and doesn’t have a private tenant dimension – is not a valid assumption at all.
The consideration given to the bedroom tax by social landlords and social tenants has been huge. Yet clearly it has not been comprehensive and considered all the variables such as the impact on private tenants and the bottom line imperative for the coalition to reconsider. It is only by looking at the lot of the private tenant and private landlord that this economic challenge to the bedroom tax policy emerges.
So private tenants join social tenants to lobby against the bedroom tax on economic and legal grounds? Hmmmm! Perhaps I can’t see that happening yet there is no doubt the bedroom tax has a private tenant dimension and one which collectively can lobby much more strongly than social tenants alone. I wonder if legal views on the irrationality of the absence of a MBS see this aspect?