Next week George Osbourne will be announcing his plans for the UK in his annual budget speech, and many tenants and landlords will be interested to hear what types of investments will be made in to the private rented accommodation sector. This is especially true as a few weeks later the welfare reforms will be launched, meaning that those receiving benefits will have to adapt to changes in how much they receive and how they receive it.
Many tenants who live in rented accommodation and receive housing benefits are concerned over the ‘bedroom tax’ scheme which is part of the welfare reforms, which states that anyone living in rented accommodation that is found to have a ‘spare room’ will have their housing benefits cut. Many landlords are also concerned with the scheme as it means that likelihood of their tenants falling into rental arrears will increase, and unless landlords have a landlord insurance policy with rent guarantee insurance included they will find themselves out of pocket.
Local councils have also criticised the new plans, with St Helene’s Deputy council leader Barrie Grunewald labeling the new Welfare Reform Bill as “shameful”. Furthermore, the chief executive of St Helen’s biggest housing association Helena Homes, Rob Young, said: “We’ve been working with local partners and politicians to highlight the serious impact of welfare reform in St Helens and been to the House of Commons to deliver our stark message directly to the Government Ministers. The limited number of one and two bedroom properties available means finding a smaller home for the 2,789 Helena tenants who need one is quite simply a challenge we can’t meet.”
Mr Young has claimed that many of the Association’s tenants will be adversely affected by the bedroom tax, and that 2,027 of their tenants will be classed as under-occupying their property by one bedroom, and 762 tenants by two bedrooms. Councillor Grunewald added: “The people affected by the bedroom tax are not shirkers lazing around behind closed curtains, living a life on the dole with acres of spare room they don’t need, but are dedicated parents of children at university, or in the army, or who live with them only half of the week, or hard-working people on low earning. What is so cruel about this policy is that it aims deliberately to drive poor people further into hardship. The Lib Dems and Tories should be ashamed.