How to take 660,000 social tenants out of the bedroom tax

Dear Social Landlord,

I have turned overnight into an arch capitalist and here I show you how to (a) increase your rent roll, (b) take all tenants out of the bedroom tax and (c) severely f*ck over the coalition government.

The answer is very simple.  I will lease all your properties with a HB claiming tenant from you keeping all social tenants in place at the full rent plus 10%.  Your income therefore increases by 10%.  Because that would make a private landlord and the now social tenant a private tenant they would claim Local Housing Allowance and not Housing Benefit.

So using Liverpool figures as an example – a low rent area – we see the following.

(a) a 3 bed property you rent for £83pw you will now receive £83 + £8.30 a total of £91.30 and I will charge the tenant the LHA rate of £91.32p per week.  I therefore make 2p per week in this circumstance and the coalition pays out £91.32pw instead of £62.25 in HB this being the £83pw less 25% deduction.

(b) A 3 bed property with a 2 bed need with see the rent rise to the 2 bed LHA rate of £109.62 per week and you the landlord will get the same £91.30 which means the tenant doesn’t get hit by the bedroom tax and I pocket £18.32 per week from this arrangement.  The coalition pays out £38.24 more pw in LHA (£109.62 less £71.38 this being the £83pw rent less the 14% deduction)

So lets assume the 11,680 under occupied properties in Liverpool are 50% of type (a) above and 50% type (b)

  • The landlord income increases by 11,680 x £8.30 or by £96,944 per week or £5.05m per year
  • The bedroom tax tenant has no shortfall to pay and of course the landlord has no financial risk.
  • I make £9.17pw on average from these 11.680 properties which is £107,105.60 per week or £5.59m per year 
  • The coalition forks out £393,094.40 per week more or £20.51m more per year.
  • The tenant does not have to fork out the other £9.87m per year and there is £9.87m additional in the local economy

Sorry everybody I must have wasted your time reading this as that nice Mr Duncan Smith and equally nice Mr Cameron and Mr Webb  says that the bedroom tax is simply treating the social tenant the same as the private tenant!!

Yours factually

Joe Rockefeller-Thatcher

PS Of course the above is parody to reflect the huge additional amounts of benefit paid to private landlords and if I used London rent figures it would be so much higher.  That said and in all seriousness is there anything at all to stop the above social landlord leasing to a private one in the manner I outline?  I don’t think there is!

PPS – This would of course level the playing-field between social and private rented and cost the HB bill a mere £2.17bn more per year base on current figures

PPPS – I would then earn £591.43m in the first year and enough to be a cabinet minister and of course pay thruppence per year in tax

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11 thoughts on “How to take 660,000 social tenants out of the bedroom tax

  1. Excellent Joe!! Maybe we should ALL print this off and send to our LANDLORDS!! They maintain they have NO choice but to implement this ‘Bedroom Tax’ Policy. They don’t actually seem to care or support their Tenants…. As long as they are still getting their rent. They don’t really give a toss, HOW!!

  2. im forwarding this to my local MP who will read this in it’s entirety. No doubt I will receive a reply as she works hard for her constituents and makes enough noise in the House of Commons. That’s if I have permission to copy this and forward it without any complications !!!!

  3. I agree. It does take the piss.Its nothing to do with money. But…. they won’t punish private rent, because they need private rent, and they know it. Apart from that, many politicians have money tied up in private property (knowing that their money might be safer in property than in the bank), you note that despite spiralling wages (I was on 26k when I left in October, I would be lucky to be paid 20k now for the same job) I started on 19.500 in March 03. House prices are rising…..they do this by keeping interest rates low.

    So, house prices are kept artificially high. No complaint about the amount of money charged by private landlords. (they have LHA but realistically the tenant will pay for this) Because they own property. So 1. They get good rental yield for their property. 2. They artificially keep house prices high – by keeping interest rates low. The ordinary man on the street THINKS that the economy is doing ok, as their house is increasing in value. Which means that in capital terms they are becoming richer…..

    Which is hilarious and ridiculous…. But capital is how people perceive their wealth. The problem is of course, the first time buyers, without them, the housing market stagnates,….. so they bring in measures to help people to buy their own property. But the terms change within 5 years, which will make it more difficult for them to afford what they have bought (not that the government cares)

    Wages are going down, prices are going up, interest rates kept down….. the government have sold pretty much everything – well apart from the NHS and state owned housing (that they haven’t made LSVT), public buildings…… well start on the public buildings, by closing down the old peoples homes….. taking away supporting people funding, so they can’t survive….. sneakily start privatising the NHS….. what else do we have left to sell…. oh the council houses….

    I hope that interest rates don’t go from this historic low – to where they went before 15.9%, if they did, people wouldn’t be able to afford their mortgages, there would be panic selling, before negative equity sets in…. house prices would fall, and then EVERYONE would realise just how fucked this country is.

    I do wonder if they have plans to sell off council homes, as most were transferred over LSVT (which raised another bit of cash)…. but some councils objected to the transfer – so they are still state owned. The move towards ending lifetime homes, now the bedroom tax, which will force more people into the private landlord sector. One thing about all politicians last 30 years – its sell sell sell….am certain they would sell the tenants (if they could), oh hang on….. 🙂

  4. I just wanted to say that private tenants have always been subject to “bedroom tax”: http://wp.me/p3kXkS-1R Under 35s are not even allowed a one-bedroom flat – they have to rent a room. Social tenants on benefits will be lucky to get a private let – no DSS. The ones that allow benefit claimants are draughty dilapidated dumps.

    The government’s version of fairness is making it worse for everyone.

  5. Local Housing Allowance and the Bedroom Tax, despite what the Government claim, are completely different animals.

    In the Private Rented Sector benefit claimants are given a Local Housing Allowance band depending on the size of their family and perceived bedroom need. This figure for a 1 bedroom property is substantially higher than the average rents for social housing for a 1, 2 or even 3 bedroom property. You keep LHA banding so if you find a 2 bedroom property the same rate as your 1 bedroom LHA rate you will still be paid the 1 bedroom LHA rate.

    In social housing, working age claimants, with some exceptions, have their eligible rent reduced by 14% or 25% depending on the size of their property. This cut still applies even if their rent for a 3 bedroom house is substantially lower than the private sector rent for a 1 bedroom house.

    If the LHA rates applied to Social Housing then every 660,000 people current impacted by the bedroom tax would have all their rent paid because social rents are substantially lower than private rents.

    Another thought – it was the previous Labour Government that instructed that social housing rents should increase above inflation – this has continued under the Conservatives and their LibDem buddies. They then turn around and say Housing Benefit spending is out of control in the social sector (It doesn’t take the greatest of minds to realise when you force rent increases on social housing the benefit bill is going to increase at a greater rate).

    1. The amount of LHA is equal to the lowest 30% of rents in the area. The chances you will find a flat that you are “entitled” to that falls within the limit, is habitable and allows DSS are slim. I dare you to find me a two-bedroom flat for a one-bedroom allowance anywhere in the UK. Theoretically it’s possible but practically it is not. Finding a house is even more difficult if one of you is a student, smokes or has pets. Considering that I will probably never be able to afford a house, it is unfair that I am unable to make my own choices as to how I want to live my life (I am prepared to pay for any extra redecoration and repair costs). I seem to have been condemned to live in my magnolia-coloured prison just because I could not afford to buy before the housing bubble and subsequent financial crisis took mortgages out of my reach.

      For years, I wanted to move to social housing for the low rents, security (they won’t chuck you out with a two-months’ notice) and good state of repair (at least in my area). I was unsuccessful. It is not my fault that now that I am disabled, the council has to pay my landlord through the nose just like I did over all these years. I know people who live in three-bedroom council houses with a garden located in quiet areas and pay less than I do for a small flat where I have to put up with night-time noise and traffic.

      I am a bit upset that nobody cares about private tenants – what about under 35s who lost their flats or have to pay £25 a week for the privilege of their own bedsit? This includes disabled people – especially those who became disabled while working. It is impossible to rent a room for the shared accommodation rate in my area. What if my relationship breaks down? Where will I go then?

      LHA and housing benefit are indeed different. The government is being unfair to all benefit claimants. I just want to publicise the fact that private tenants are being screwed as well because nobody mentions it and if they do, they think we are better off.

  6. workshyscrounger – the reforms to Housing Benefit and the introduction of LHA rates happened under Labour and were supported by the Conservatives.

    The cuts to over 25s and under 35s happened under the Conservatives but opposed by Labour but there was hardly any opposition.

    Before Tony Blair took control in 1997 the Conservatives were going to cut Housing Benefit for all single people under 60 to the single room rate. This was one of the first things Labour stopped happening – but they failed to reverse the under 25 rule.

    The Conservatives are only continuing the policy they tried to introduce in 1997 – when will they extend the one room rate to everyone under 60? I think this is where they will aim there next cut – and probably also scrapping housing benefit for everyone under 25.

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