Bedroom Tax – a VERY interesting development!

I read something very interesting yesterday  – a comment on Facebook by a tenant which I followed up and have seen the documentary evidence to support.

In a nutshell the events are:

  1. A tenant gets a letter from the landlord saying in arrears with the bedroom tax.
  2. The tenant writes to landlord saying a bedroom tax appeal has gone in.
  3. The landlords income officer writes back and says okay and says pay £3.60 per week while you are appealing!

If that becomes common practice and is not just a one-off example then the social landlord is in big financial trouble! Yes the tenant will get into arrears too and get into trouble and I discuss this below, however, the financial mess the landlord will get into deserves much closer consideration.

Firstly, issues spread like wildfire across social media and especially Facebook and tenants will believe this is correct as they will want to believe it.  It cuts the average bedroom tax shortfall payment of £14 per week down to £3.60 per week and that explains why the bedroom tax tenant will want to believe it and especially so if they have a 25% deduction obviously.

Secondly, there is some underlying credence to this as prior to the bedroom tax being applied a judge would invariably suspend a possession order based on two conditions – (a) the payment of full rent and, (b) £3.60 per week off the arrears.  That traditional view has also implied that the judiciary believe paying £3.60 per week off rent arrears from welfare benefits is both realistic and a maximum amount.

Thirdly, and linked, the tenant may want to or may choose to ignore the first condition of suspending a possession case which is the payment of full rent.  They should not do this of course but I suspect they may.

Fourthly, there is a sense of ‘can’t pay won’t pay‘ right across social tenants and this has become a bit of a mantra. Whether this position is right or wrong is not the issue, the issue is its perception of right amongst tenants.

Fifthly, first impressions count as the old adage goes and so doubtless many tenants will believe they can ‘get away’ with paying just £3.60 per week and when the inevitable response from the social landlord is this is not the case, then the social landlord appears even more ‘complicit’ in the bedroom tax debacle.  The social landlord cannot win either way.

Sixth, I had a national editor on the phone to me two weeks ago saying they have polled Local Authorities up and down the country asking their views on how many tenants would NOT pay the bedroom tax shortfall.  While this can only be a view or a best guess the answer was about 20% – 25% of those with 1 spare bedroom would not pay anything and on average 50% of those with 2+ spare bedrooms would pay nothing.  That in money terms translated to about a £140m non-payment and a £140m hit to social landlords.

When you then add to this the errant perception that tenants will have that it is ok to simply pay £3.60 per week that £140m figure increases significantly and if all tenants did this it takes the hit of social landlords to £360m or so!

Then evictions will happen more and a lot sooner.  Yet this increases the landlord hit again because the average cost of an eviction is about £8,000 to the landlord in costs, arrears and rent loss etc according to figures from Shelter and it could be as high as £24k per eviction as I discussed here.

For every 1% of bedroom tax tenants evicted this is a further £53m pa cost to the social landlord!

The social landlords have yet another huge issue to counter and past performance suggests they will struggle massively with this one!

 

 

 

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12 thoughts on “Bedroom Tax – a VERY interesting development!

  1. And the vicious circle continues – Social landlords are tasked with building more one bedroom properties – the more rent arrears and the more legal costs means social landlords will have less money to build more homes. Poor social landlords just can’t win.

  2. A friend has already been hit with a demand for none payment of rent, to the tune of £23 with threats of court action already. This is not even a full weeks rent. So she checked the landlords website and it seems they won’t go to court (or can’t) until the arrears amount to 8 FULL weeks rent. At that rate she can get all the way up to 55 weeks in arrears before she gets taken to court.

  3. I was told today by mt HA rent officer that I must pay in full even though I am appealing the bedroom tax decision. Under no circumstances will they allow leeway (sp?) and will start enforcement action if I refuse. Thankyou Sovereign HA you really care about your tennants dont you?

  4. I dont understand the law, but isnt an appeal a legal right and venture and if they were to continue to seek possession whilst appeal is going through, a court would suspend the case until appeal has been concluded as it wouldnt have the entire picture to make a decision on. If an appeal is won and court had made a decision based on only part of the picture, would that not result in court and HA be putting themselves open to a lawsuit themselves. Like I say i dont know the legal implications, but am certain a judge cannot make a decision if the possibility is, that the evidence presented is incorrect. If tenant won the appeal then evidence from HA would be corrupt. John I would maybe suggest paying the £3.60pwk this shows that you are trying and should HA try evicting you before your appeal is complete it shows to court that you have been making an effort. but i believe as Pam has said this is a scare tactics. What they dont seem to get such campaigns that are going on offer us support and advice so we are not alone. we know that there are around 660,000 people affected by the BT. That to me is a lot of support, and then there are those who are not blinkered by the government who have hearts and compassion who also offer support. gl with appeals.

  5. remember folks if bedroom tax is like council tax there are no liability orders they dont exist!!!! that means no one should be evicted!!! just attend court, you will see only council officials!!! accept the crap they say but dont sign anything!!! walk away but if they return with threats ask to see original LIABILITY ORDER !!! they wont be able to produce one they dont exist!!!

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