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20 November 2013

'Bedroom tax' will mean 1,000 fewer homes in Wales

The solution: Devolve Welfare to Wales

In the midst of an on-going crisis in the supply of affordable housing, the UK Government’s ‘bedroom tax’ policy is causing misery across Wales and is costing more than one thousand much needed affordable homes in Wales, according to new research by Community Housing Cymru.

Nick Bennett, Group Chief Executive of CHC explains: “Just six months into this policy, we see a double whammy affecting the supply crisis. We’ve seen a surge in the number of ‘void’ or empty properties and 78 per cent of our members have seen an increase in rent arrears, with over £1 million attributed to the ‘bedroom tax’.”

51 per cent of tenants are paying the shortfall in their rent, 37 per cent are part-paying and 12 per cent are paying nothing at all.

Nick added: “We anticipate that the number of tenants struggling to pay their rent will only increase, and we can expect ‘bedroom tax’ arrears to double to over £2m by April next year, enough to service around £40m worth of debt which could be used to deliver 400 new affordable homes. The rise in void properties has meant that over 700 homes in the sector are increasingly hard to let, with many remaining empty. With an estimated 90,000 people on social housing waiting lists, can we justify a policy that sees Wales losing out on 1,000 affordable homes?”

Just 3% of the 22,000 housing association tenants affected have been successfully downsized. CHC has continued to argue that there are simply not enough one and two bed properties for people to move to. They welcomed additional investment of £5m for 2014/15 and £15m for 2015/16 from Welsh Government to build smaller properties.

CHC believes that landlords are faced with tough choices and that this policy threatens social justice and cohesion, turning tenant against tenant, tenant against landlord and vice versa.

Nick added: “We note what’s been happening around Wales with various protests against the ‘bedroom tax’, with landlords getting the blame. Tenant groups and some politicians have campaigned for a ‘no bedroom tax evictions’ policy, but landlords can’t continue to subsidise the extra costs brought about by welfare reform which would impact on the potential reduction in services for other tenants who pay their rent. We need to stand back and realise that the only solution is to take power closer to the people.”

“We can now look to Northern Ireland and see them using their powers in welfare policy to do something different. They have legislated to stop the ‘bedroom tax’ affecting existing tenants. Like Wales, it is affected to a far greater degree than England and Scotland, but their devolution settlement has allowed them to protect the people of Northern Ireland from the policy, and also to adapt the upcoming changes to Universal Credit and direct payments to fit the needs of Northern Irish tenants. With the Silk Commission due to report on further powers for the Assembly in the New Year, we believe this is a perfect opportunity to give Wales parity with Northern Ireland on welfare powers.’