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Bedroom Tax "badly thought-out and landlords lose out"

A leading North East lettings agent has warned that the government’s so-called Bedroom Tax is “badly thought out and might mean landlords lose out” - even though the policy does not directly affect private tenants.

Ajay Jagota of KIS Lettings fears the policy will cause “unnecessary uncertainty and instability in the rented property market, which is the last thing anyone needs”.

Changes to housing benefit being introduced this April will see council tenants and people renting from housing associations losing up to 25% of any housing benefit they receive if they are deemed to have too many bedrooms.

Designed to cut the welfare bill and free up living space for overcrowded families the policy has been criticised for unfairly penalising people with disabilities or experiencing family breakdown, for failing to take into account parts of the country like the North East where there is limited supply of smaller accommodationand for actually costing the taxpayer more money by forcing tenants into more expensive properties.

Ajay Jagota is managing director of KIS Lettings, who manage properties for some 700 landlords across the North East from branches in Sunderland, North Tyneside and South Tyneside.

He said: “One of the major criticisms of the bedroom tax is that the government will actually cost itself more money than it saves by forcing people to move from social housing into the private sector, which tends to be more expensive.

“You might at least think that this is good news for landlords, but that isn’t necessarily the case.

“It’s a major misconception that social and private rented housing are somehow separate of each other - it’s inevitable that anything which has a major impact on one will have a knock on effect on the other.

“The bedroom tax is another piece of government action which causes unnecessary uncertainty and instability in the rented property market, which is the last thing anyone needs and when what landlords want and need is stable and sustainable tenancies.

“When coupled with other changes to universal benefit like housing benefit being paid to tenants instead of landlords, this private rented sector is facing an uncertain few months, which may stop landlords investing when the government desperately needs them to bring more properties to the market and when there is already a supply problem in the private rented sector.

“At the very least the government is relying on private landlords to deal with the impact of the bedroom tax. Landlords do not necessarily have deep enough pockets to do this and I’d call upon the government to consider incentives to help with the burden it has placed on them.”

This was posted in Bdaily's Members' News section by Ajay Jagota .