Underoccupation of housing is clearly an issue in a country where many people are grossly
overcrowded and others homeless.
But the Government’s hypocrisy on the issue is demonstrated by their response to two
events – their hostile reaction to the publication today of a report on underoccupation amongst home owners; and their refusal to accept a Labour proposal in the House of Lords to soften the impact of housing benefit cuts on social tenants deemed to have more space than they need.
In the Lords, an amendment to the Welfare Reform Bill by Labour’s Lady Patricia Hollis proposed a modest change to the effect that the regulations governing the removal of
housing benefit from social tenants with one or more spare rooms should take into account the availability of suitable accommodation to which the tenant might move. The Minister, Lord Freud, refused to accept the amendment, despite the fact that hundreds of thousands of tenants will face a benefit cut with no reasonable prospect of being able to take avoidance action by moving to a smaller home, arguing that it was not ‘fair’ for social tenants to have properties that are larger than required whilst others are overcrowded. Tenants, unable to move, will face what is in effect a fine for something over which they have no control.
The report by the Intergenerational Foundation argued that even if you allowed home owners a spare room there are 18 million unoccupied bedrooms across England. More than half of over-65s are in homes with two or more spare bedrooms. They say that the tax system encourages home owners to ‘hoard’ space and that there are few if any incentives to downsize. As a result, housing resources and housing wealth are increasingly concentrated in the hands of existing, often elderly, home owners while younger people, often with families, are increasingly excluded from being able to buy family homes.
IF argued for a series of changes including abolishing stamp duty for downsizers, increasing the supply of appropriate homes, especially bungalows, for downsizers, introducing a property value tax, and abolishing council tax concessions for single occupation.
The report deserves to be debated seriously. There has been some (deserved) criticism for its tone, the simplistic notion of one generation stealing from another, and the use of words like ‘hoarding’. I think there is also some deficiency in analysis and in particular around the assumption that older home owners being taxed or incentivised to downsize would automatically benefit young families and get them a suitable home. The market mechanism would not necessarily achieve this and the core problem of house
values being too high in relation to incomes would remain.
Serious debate was the last thing on Grant Shapps’ mind. He was quick with a damning quote, telling the BBC “Whilst this report makes interesting reading, we do not agree that people should be taxed or bullied out of their homes.”
The difference between Lord Freud’s attitude to tenants and Grant Shapps’ attitude to
home owners is stark. Any attempt to make home ownership fairer by addressing its tax advantages over other forms of investment and other forms of tenure is seen as bullying, whereas anything goes in relation to tenants.
The truth is that it is social tenants who are about to be bullied out of their homes. The change in housing benefit rules for social tenants with a spare room is one of the more callous and coercive elements in the Welfare Reform Bill, but there is still very limited awareness of its huge potential impact.
An excellent piece on the same topic by Patrick Butler in the Guardian can be found here.