Bedroom tax could cost poor families in Manchester up to £926 per year – new figures

Plans by the coalition to penalise social tenants living in homes deemed too large for their needs could cost families in Manchester up to £926 per year, new figures reveal.

The Government has previously estimated that 120,000 families across the North West will lose an average of £624 per year under the new social sector “size criteria”.

But analysis by the National Housing Federation, which represents housing associations, shows for the first time the true extent of the cuts faced by many families.

Based on cuts of up to 25% of a family’s housing benefit that the Government is considering introducing in 2013, a household deemed to be under-occupying a three-bedroom home in Manchester faces losing up to £18 per week of their housing benefit – or £926 per year.

Such a household would be forced to choose between going into debt, struggling to meet payments by cutting back on essentials, or trying to move – even if no suitable alternative properties are available.

Under the current system, social landlords allocate families a home based on an assessment of their needs. This may mean that teenagers are given their own bedroom and an additional bedroom may be provided to young couples planning to start a family. Where a family is out of work, housing benefit covers the rent, which is far lower than in the private rented sector.

Under the new size criteria, a family may be penalised for “under-occupying” even where every bedroom in the home is in regular use. For example, benefit may be cut where teenagers have been given their own bedroom, rather than being forced to share. Separated parents will be penalised for keeping a “spare” bedroom for when their children visit. And foster parents will receive a cut even where their bedrooms are occupied by foster children, who for benefit purposes do not count as part of the household.

Anyone deemed to be under-occupying by one bedroom stands to lose up to 15% of their housing benefit and those considered to have two or more “spare” bedrooms – even if they are in use – will lose up to 25% of their benefit. Two-thirds of those affected are disabled, the Department for Work and Pensions has admitted.

Federation analysis, using new figures from the Department for Communities and Local Government, shows that the average social sector rent for three-bedroom properties in Manchester is £71. This means affected families face losing between £11 and £18 per week – or between £556 and £926 per year.

The under-occupation penalty, part of the Welfare Reform Bill, will hit 670,000 working-age families across Great Britain when it comes into force in April 2013.
The total affected is forecast to rise to 760,000 by 2020 as the state pension credit age increases.

Ahead of the Bill’s Report Stage in the House of Lords, scheduled to begin on December 12, the National Housing Federation is calling on the Government to make the rules more flexible, to allow one additional bedroom above that permitted by the proposed criteria. Crossbench peer Lord Best plans to table an amendment to this effect but it will need the support of peers from across the political spectrum to stand a chance of making the statute books.

Jon Longden, lead manager for the North West for the National Housing Federation, said: “We have been deeply concerned about this bedroom tax for some time but these new figures show the damage will be far worse than previously thought.

“Hard-up families in Manchester face penalties of up to £926 a year simply because the Government have deemed their homes are suddenly too big for their needs.

“This will have disastrous implications for a huge number of people already struggling to make ends meet in the tough economic climate, including foster carers, grandparents, disabled people and smaller families.

Mr Longden added: “In the vast majority of cases, people will simply not be able to make up the shortfall themselves and could end up being sucked into poverty and spiralling levels of debt.”

Greater Manchester families face total of 274,190 years of waiting list misery

It would take 274,190 years to clear the backlog of Greater Manchester families waiting for social housing because of the broken housing market, the National Housing Federation revealed today.

The Home Truths report paints a bleak picture of Greater Manchester’s housing market where families can no longer afford to buy or rent homes. 106,652 households are now languishing on social housing waiting lists, as spiralling mortgage deposits and private rents push affordable housing out of reach for many.

With the average Greater Manchester wage standing at £19,932, an average house costs 7.7 times the average income.

Jon Longden, the National Housing Federation’s lead manager for the North West, commented: ‘Caught in an impossible can’t buy/can’t rent dilemma, families face life-changing years on social housing waiting lists. With the lowest number of new homes for 90 years, the only things we are building up are long term problems for schooling, health and jobs.

‘The North West desperately needs a strong social housing sector to help economic development. The Government must act quickly so more affordable homes are built and empty homes are brought back into use before the North’s broken housing market gets any worse.’

Meanwhile, average rents in the private sector are set to soar in the next five years by 18.7% across the North West.

Housing associations are doing their best to make a difference. In 2010/11 they built 4,120 new affordable homes, including 442 low cost home ownership properties, and they now house one in every seven North West households.

Yet more needs to be done. Only 9,250 new homes in the private and social sectors were built across the North West in 2010/11 – providing homes for just 43% of the new households estimated to form in the region every year.

The National Housing Federation is calling on the Government to fix the North West’s broken housing market. The Government is being urged to renew its commitment to building new homes at scale and to restore the £300 million annual funding to regenerate inner-city neighbourhoods across the region. This will support housing which is a key driver of economic activity across the North.

14,000 Manchester families face hardship due to ‘spare bedroom tax’

More than 14,000 families in Manchester living in social housing will face the stark choice of moving home or being plunged into hardship and debt under new Government proposals, the National Housing Federation revealed today.

Plans to penalise 120,000 families in the North West for renting a home with a ‘spare’ room will cost social housing tenants £74.88 million a year.

The North West will be one of the areas hardest hit by the Government’s proposed Welfare Reform Bill to be introduced in 2013, with 43 per cent of social housing tenants on housing benefit losing an average of £624 a year due to the ‘spare bedroom tax’.

Disabled people, foster carers and care sharers will be amongst the worst affected. Two-thirds of the people to be targeted by the changes are disabled even though many have had their homes adapted for their needs. Foster carers will also be hit as foster children occupying additional bedrooms will not count as part of the household for the purpose of housing benefit.

Under the proposals, social housing tenants with one spare bedroom will have a choice of moving or having their housing benefit cut by 13%, rising to a 23% cut for two or more spare bedrooms. It will apply to all social housing tenants of working age, in receipt of housing benefit, who are deemed to be “under occupying” their home even if they have lived there for decades.

Many people could be priced out of their homes or be forced to live in hardship and debt miles away from their family and support network as a result of the measures. In the North longstanding insufficient investment in social housing, previous urban depopulations and a lack of smaller homes has led to almost one in every two working-age social housing claimants classed as an ‘under-occupier’. Meanwhile, there are not enough smaller homes available for people to downsize into.

The National Housing Federation is calling for the Government to build more homes better suited to contemporary needs. Building smaller homes to facilitate downsizing would stimulate both the housing market and the economy.