Published:

5 comments

Family shield

So cutting the spare room subsidy has encouraged those with spare rooms to get jobs or swap with the overcrowded. But what of those who have put off this choice and just fallen behind with the rent? There have been some but the curious aspect, as with the dog in the Sherlock Holmes story that didn’t bark in the night, has been that rent arrears have be falling.

Here is some information from a recent Parliamentary Question. I fear the Shadow Justice Secretary Sadiq Khan scored a own goal by asking it:

Sadiq Khan: To ask the Secretary of State for Communities and Local Government how many people subject to the under-occupancy penalty were evicted in each London borough in the last 12 months.

Kris Hopkins: In my answer of 27 November 2013, Official Report, column 340W, I observed that a report from the social housing regulator, the Homes and Communities Agency, noted that in the second quarter since the removal of the spare room subsidy (i.e. second quarter of 2013-14), there had been no indication of significant adverse performance in arrears, voids or rent collection.

The Agency has recently published figures for the third quarter of 2013-14 and it notes that median rate arrears fell in the last quarter (from 4.1% to 3.9%), that median void losses were unchanged, and that median rent collection rose from 98% to 99%.

The Agency concluded: “the overall picture on income collection is one of stability” (HCA, ‘Quarterly Survey of Private Registered Providers 2013/14 Quarter 3′, February 2014).

Moreover, according to the most recent Ministry of Justice statistics, the number of cases lodged by social landlords for repossessions by county court bailiffs across the whole of England and Wales was 4,757 in Q1 2013, 4,600 in Q2 2013 and 4,992 in Q4 2013. As a proportion of all landlord repossession claims, the social sector encompassed 51% of all repossession claims in Q1 2013, 50% in Q2 2013, 51% in Q3 2013 and 52% in Q4 2013. This gives lie to some of the recent exaggerated claims made by HM Opposition.

I would add that the removal of the spare room subsidy is estimated to save £490 million of taxpayers’ money in Great Britain in 2013-14 by reducing the benefit bill, helping pay off the budget deficit left by the last Administration. The measure also encourages the more effective use of social housing, by addressing the under-occupation of family homes.

24 Housing Magazine, which opposes the spare room subsidy cut, has a piece by Jules Birch in this month’s issue about the rent arrears aspect which acknowledges “a more complex picture” than previously stated. Affinity Sutton, one of the biggest housing associations in the country, says that rent arrears have gone down overall – but that they have risen for those affected by the spare room subsidy cut. Aileen Evans of the Aragon Housing Association in Bedfordshire says their overall arrears were 2 per cent in March 2013. They are 1.68 per cent. She says the reduction is “beyond our wildest dreams.” In Wales a housing association called Bron Afon Community Housing has also seen arrears fall. They are piloting direct payment of rent under the Universal Credit.

Certainly the picture is mixed around the country. Some social landlords have coped better than others. But all the extravagant claims about a huge rise in rent arrears have turned out to be false.

 

5 comments for: The curious incident of the rent arrears caused by the spare room subsidy cut

Leave a Reply

You must be logged in to post a comment.