Housing Benefit: the under-occupancy rules

The idea of limiting the size of accommodation that tenants of social housing could occupy was first proposed two years ago. It was resisted in the House of Lords earlier this year, and a critical judgment in the Court of Appeal (Burnip, Annex C of the linked document) has challenged its application to people with disabilities, but new draft regulations are set to bring it into force for many tenants, beginning next April. It is based on the ‘bedroom standard’ introduced in 1960 to measure overcrowding. It allows a couple or person over 16 to have one bedroom; any two children under the age of 10, and any two children under 16 of the same sex. By this standard, most households in the UK have at least one ‘spare’ bedroom. Housing Benefit claimants of working age in social housing will lose 14% of their entitlement if they are under-occupying by one bedroom, 25% if they are under-occupying by two or more. It is difficult, given the number of overlapping cuts taking place in Housing Benefit, to know which is going to have the largest effect, but this is a contender.

The general reduction in support for rented housing is a serious cut in benefits in its own right, but it also presents a major challenge for the allocation of social housing. (I haven’t written about allocations for a time, but it was how I started my career, and I’ve done several reports about it in the past.) Most properties in social housing have two or three bedrooms. Many applicants for social housing are single people, who under the new rules can only occupy one bedroom. Most families with children – and 80% of those on benefits – have one or two children. The distribution of properties generally requires landlords, then, to offer one or two bedrooms to single people, and three bedrooms to families with two or more children. Social landlords have to ensure that their property is occupied and rent is paid; if they routinely allocated only two bedrooms to families with two young children or children of the same sex, there would not then be enough qualifying families to let their three-bedroom properties to. Many of those people will consequently be ‘underoccupying’, and subject to the penalty. The Scottish Government has estimated that about 45% of social tenants overall are underoccupying, and possibly 95,000 tenants currently receiving Housing Benefit – about 35% of tenants, rather higher than the DWP’s initial estimate – will be hit by the benefit cuts.

There may be some ways round the problem, for some housing agencies at least. One is to redefine what makes a bedroom – many modern properties combined storage space to carve out a small room from the finance, and it could be classified as storage space again. A second option is to let more three bedroom properties to single sharers as joint tenants, but that will involve a major shift of practice, and a commitment of housing managers to make it work.

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