New Bedroom Tax Could Spell Big Profits for PRS Landlords

25 June 2012 Categories: News

New Bedroom Tax Could Spell Big Profits for PRS Landlords

It is estimated that over 670,000 households in the UK will be affected by the introduction of the government’s new scheme in April 2013 which will see tenants in social housing penalised for under-occupying their properties. The new ‘bedroom tax’ will be experienced by families or households with spare rooms and will be deducted from the benefits received at a rate of 14% for one spare room and 25% for two or more spare rooms.

Predictions show that in the North East of England alone over 50,000 households will be affected to the point where tenants will be forced to move into smaller properties, many of which will be in the private rental sector. Coast & Country, one of the larger housing associations working in the North East, say that around 2500 of their tenants are currently considered to be under-occupying their properties, but at present they only have 16 spare one-bedroom properties available for relocating.

The thought is then that thousands of tenants will be forced to look at private rented accommodation as an alternative to social housing they can no longer afford because of their cut in benefits, and as such landlords in the North East are being urged to consider smaller properties to cope with the expected influx of new tenants during the first quarter of 2013.