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12 February 2014

Two thirds of households hit by 'bedroom tax' are in debt as anniversary approaches

Press release from the National Housing Federation:

Two thirds of households affected by the bedroom tax cannot find the money to pay their rents, according to new research from the National Housing Federation.

An Ipsos MORI survey of 183 housing associations carried out for the Federation found that 66% of their residents hit by the bedroom tax are in rent arrears, with more than a third (38%) reported to be in debt because they were unable to pay the bedroom tax. This is equivalent to 72,000 housing association tenants in England alone who are in rent arrears because of the policy.

As rent arrears build up, letters are automatically sent out warning residents they are at risk of eviction. More than one in seven households (15%) hit by the bedroom tax had received an eviction risk letter by October 2013 and are in danger of losing their homes.

The research also found that housing associations have invested millions of pounds to mitigate the impacts of the bedroom tax. Each housing association with affected tenants spent an average of £73,250 on additional resources before April 2013 to help their residents prepare and cope, including welfare and financial advice services. It is estimated that associations are spending even more this year, an extra £109,000 each on average, by March 2014, with larger associations spending up to £2.18m.

Around 413,000 people in England are affected by the social sector size criteria – more commonly known as the bedroom tax. An estimated two-thirds of them are disabled, according to Government figures. Demand for Discretionary Housing Payments, a limited emergency fund provided by the Government for the most vulnerable households impacted by the bedroom tax, has tripled this year according to Federation research from December.

National Housing Federation chief executive David Orr said:

“You can argue over what to call the policy, but there is no disputing the impact that the bedroom tax is having across the country. It is heaping misery and hardship on already struggling families, pushing them into arrears. Now many are at risk of being evicted because they simply can’t find the extra money to pay their rent.

“These people have done nothing wrong. The Government has suddenly changed the rules and given them a false choice: move to a smaller home or pay. Yet we know there aren’t enough smaller homes in England9 for these families to move into.

“Housing associations are doing all they can to avoid evicting residents, but as not-for-profit organisations they can’t simply write-off unpaid rent. From day one we have said the bedroom tax is unfair, unworkable and just bad policy. It’s putting severe pressure on thousands of the nation’s poorest people and must be repealed.”

You can read the full report here.