Jess McCabe

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Home straits Downsizing with the bedroom tax 17 July 2014 The price for underoccupying a…

Home straits

Downsizing with the bedroom tax

Ilo of sardine in tin

The price for underoccupying a home is high for many vulnerable people. Jess McCabe visits Stoke-on-Trent to find out how landlords are attempting to help

‘It was a shock to the system,’ says Shaun Bostock. ‘It’s bad enough losing someone.’

In the middle of a jobs club in a church hall in Stoke-on-Trent, as half a dozen locals receive computer lessons and careers advice, the mild-mannered 49-year-old’s voice starts to quiver. After 18 years of caring for his sick mother full-time, she died.

After a bereavement, social housing tenants are given a year’s grace period before the bedroom tax is imposed, or three months under universal credit. But, to Mr Bostock, it was a worry looming on the horizon. He felt he was about to lose the home they had shared for 21 years as well.

‘We lived in a bungalow in Keele. When she died, the bedroom tax came into [effect],’ he says.

Forced out
His dead mother’s bedroom was reclassified as a ‘spare’ room.

‘I already had massive debts to deal with,’ Mr Bostock explains – as he had repeatedly taken out loans to fill the gap between their income and expenditure. Paying the bedroom tax – housing benefit is reduced by 14 per cent for one spare room – was beyond his means.

‘I volunteer here and come to the job club to build up my confidence because I’m not good on computers. I haven’t worked in a long, long time,’ he adds. One day, he hopes to get a paid job as a carer.

‘When I cared for my mum, I was saving the country a small fortune. It didn’t seem fair,’ he says.

Despite his tragic circumstances, Mr Bostock is actually one of the lucky ones. Thanks to the intervention of his landlord, Aspire Housing, he has managed to downsize into a one-bedroom flat in Newcastle-under-Lyme, before the bedroom tax would have applied.

In 2012, as the housing association prepared for the start of the welfare reforms, Inside Housing accompanied Aspire income manager Paul Malkin as he knocked on doors and gave tenants like Mr Bostock the bad news: they were deemed to have a spare bedroom, and were about to be hit by the bedroom tax.

This was one of the social landlord’s strategies to prepare for the start of welfare reforms, which came into force in April 2013: finding out exactly who was living in its 8,500 homes and gearing up to help tenants avoid getting into financial trouble.

Now, Inside Housing has returned to see how Aspire is helping tenants to downsize to homes they will not be underoccupying, and so avoid the bedroom tax either by transferring to another property as Mr Bostock has done, or taking part in a mutual exchange.

Down sizing 
As the bedroom tax came in, social landlords warned that it would take decades to downsize all their underoccupying tenants. So has Aspire managed to use downsizing to head off the threat of welfare reform, both to its own balance sheet and its tenants’ well-being?

Aspire has certainly managed to reduce the number of underoccupying tenants.

When Inside Housing first visited Newcaste-under-Lyme in November 2012, the landlord estimated that about 750 of its 1,500 underoccupying tenants were about to be affected by the tax. When we returned in May 2014, it had 689.

GAIL_AUSTIN

Solution: Gail Austin outside her new bungalow

Of these, nearly 60 per cent are fully up to date on their rent payments. Only eight tenants are in such a serious situation that they have racked up more than £1,000 in arrears, including bedroom tax. With rents of around £80 a week, that would take several months of non-payment.

‘We haven’t evicted anybody yet solely for bedroom tax, it’s been bedroom tax plus other things. So looking into eviction is a very last resort for us – kicking people out is not the kind of business we’re in,’ says Wayne Hughes, managing director of Aspire Housing.

But what can home exchanges do to help people in this situation? Across the country, more social tenants are interested in mutual exchanges, reports Circle Housing, a 66,000-home housing association which also runs House Exchange, a nationwide online service for social housing tenants wanting to exchange homes with other tenants.

Kim Doran, house exchange manager at Circle, says: ‘Since the introduction of the under-occupation penalty in April 2013, we’ve seen a 29 per cent increase in visits to the site, a 36 per cent increase in registrations and a 52 per cent increase in successful downsizing exchanges.’

Still, for Aspire the number of tenants who have escaped the bedroom tax by transferring or taking part in a mutual exchange is still relatively low: only 81 underoccupying tenants who are under 60 years old have transferred. In March – the most recent month for which Aspire provided data – out of 58 mutual exchanges, half of those who swapped homes had previously been underoccupying.

Aspire’s Mr Hughes sees transferring as only one part of the puzzle.

‘We are taking the view here that our best response to welfare reform is to help our customers off benefit and into work,’ he says.

The landlord has managed to increase the number of successful transfers since it changed its qualification policy. Normally, tenants can’t transfer if they are in arrears. But to stop people getting into deeper financial difficulties, Aspire lifted this condition in April 2013, and allowed tenants affected by the bedroom tax to transfer even if they are in arrears.

‘They’ve got to show they’re making an effort still [by] paying some of it,’ adds Mr Malkin, explaining how Aspire adjusted its policy to stop tenants getting in even worse financial situations.

Open options
Gail Austin, who describes herself as ‘37 going on 90’, is one of the tenants who has benefited from the switch in policy.

Walking up to Ms Austin’s bungalow in a quiet cul-de-sac, the smell is of freshly cut grass. The small cluster of homes all have guard rails by the door – an indication that they have been adapted for disabled tenants just like Ms Austen, who was struggling to cope in her cold, three-bedroom house before the bedroom tax.

Around the back of the warden-controlled development, the small home looks out on to a shared green space, and some visiting ducks.

Ms Austin has a serious lung condition – her living room features a nebuliser and pill boxes, as well as dozens of pictures of her children and grandchildren.

But, she says, ‘I feel much better in myself now.’

For Ms Austin, the introduction of the bedroom tax was actually a good thing. Mr Malkin discovered her case as a result of the landlord’s efforts to head off revenue loss from the policy, having noted her high level of arrears. She had applied for an exchange about two years before, but the application was not successful.

Having looked into her case, Aspire realised Ms Austin’s previous house was unsuitable for someone with her medical condition and arranged the transfer, suspending the rules on moving tenants who are in arrears.

But ultimately, once Mr Malkin got involved, an examination of her records uncovered the fact she had been overpaying on her rent for some time. Newcastle-under-Lyme Council duly reimbursed her more than £3,000, wiping out the arrears and leaving her some extra cash to install carpet and furnishings in her new bungalow.

So efforts to downsize tenants can pay off. In these cases, tenants are more or less happily relocated, rent is coming in and Aspire’s bottom line is protected. The results can be mixed – for Ms Austin, the policy was the spark for a transfer she needed for health reasons and the high-level intervention of Aspire’s team erased her arrears problem. For Mr Bostock, however, the effects of being forced to move still linger.

‘There ought to be a more sensitive way of doing it,’ he says.

In numbers: House swaps

8
Aspire tenants are more than £1,000 in arrears

392
Aspire tenants on the list for a transfer in May 2014

25.5%
on the transfer list are underoccupying

81
underoccupying tenants under the age of 60 have transferred to another Aspire home since April 2012

50%
of the mutual exchanges completed by Aspire tenants in May involved those who were underoccupying

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