For tenants directly affected by the under occupation penalty, more than half (55 per cent) are in arrears, representing an increase of 27 per cent, causing hardship for tenants and serious financial implications for landlords.
The findings are the result of a joint research project from the National Federation of ALMOs (NFA), the Association of Retained Council Housing (ARCH) and the Councils with ALMOs Group (CWAG), into the impact of welfare reforms on council tenants. The information was gathered around December 2013, nine months after the Government introduced the 'bedroom tax'. Together the three housing bodies represent over 1.3m council properties across the country.
The survey revealed striking regional variations with the South West of England experiencing the highest proportion of households affected by the under-occupation penalty and in arrears and the northern region seeing the highest increase in the level of arrears for those affected by welfare reforms.
Bucking the national trend, London saw a fall in the proportion of households affected by the changes and in arrears over the same period.
Despite the high levels of support and financial advice available from housing providers, there has also been a significant rise in the number of landlords resorting to court action (55 per cent) compared to just two percent when members were last surveyed in June 2013.
Commenting on the report NFA policy director, Chloe Fletcher, said: “The results of this survey indicate that three quarters of a year in – welfare reform is still adversely affecting both tenants and landlords. Housing organisations across the country have put a great deal of effort into reducing the impact of reforms such as the ‘bedroom tax’ and it is certain that without this support and assistance, the situation would be even more serious.
“The NFA believes that the under occupation penalty should be reformed, that making Universal Credit payments to landlords should be a ‘tenant choice’ and that more resources should be made available to give tenants financial support and advice.”
ARCH policy adviser Matthew Warburton said: “The majority of under-occupying tenants are still trying to ‘pay and stay’ but few will be able to sustain this approach. We are yet to see the full adverse impact of these reforms.”
CWAG policy adviser Alison Freeman said: “Dealing with the impact of welfare reform has been the number one priority for CWAG members in the past year. The striking regional differences highlighted by this survey give weight to calls for a more flexible approach, particularly in parts of the country where there is a shortage of smaller properties. For many in these areas, downsizing to a smaller property isn’t an option.”
The survey also examined the extent to which tenants were able to move to a smaller property – one of the original goals of welfare policy reforms. In the first nine months, only 4.6 percent of tenants affected by welfare changes had moved to an alternative social housing property with the majority, 60 percent, choosing to ‘pay and stay’.
The NFA, ARCH and CWAG will capture the final quarter’s data of the first year, after the introduction of the under-occupation penalty, from its members in the summer and will report on the policy’s effect on tenants and landlords in the whole of 2013/14 in the Autumn.
