Total Landlord Insurance: The introduction of bedroom tax and how it affects landlords and tenants

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What landlords and tenants need to know about recent change in legislation

For those making the move into private rentals, it’s important to understand the differences – such as many landlords may expect you to pay a security deposit as well as one month’s rent in advance.

Last month saw local authority landlords affected by what Labour is referring to as ‘bedroom tax’, after the government opted to withdraw benefit from social housing tenants residing in accommodation defined as being a spare room.    

Any tenant with a spare room will automatically be deducted 14 per cent in housing benefit, and claiming there is no such alternative housing for the 96 per cent of those affected by the change, Labour is strongly opposing this scheme. However, ministers are reporting that the move will help save taxpayers around £500 million a year.

CEO of Total Landlord Insurance, Eddie Hooker, said: “Understandably this news will come as a bit of a blow to tenants in local authority housing, but thankfully there are some who are exempt from this ruling – including foster carers and families, armed services personnel as well as disabled tenants requiring non-resident overnight care. Some of the statistics reported actually indicate that many have chosen to stay on regardless of the bedroom tax.”

According to a questionnaire conducted by Inside Housing out of the 161,029 households rented out by 73 social landlords across the UK, only 1,963 moved back home before the penalty came into effect. Yet by enforcing bedroom tax, this will in fact benefit private rentals. With many not wishing to lose out on their benefits, people will be seeking smaller accommodation – meaning a boost for private rented property.

“For those making the move into private rentals, it’s important to understand the differences – such as many landlords may expect you to pay a security deposit as well as one month’s rent in advance,” explained Hooker.

“We advise anyone looking into private rented accommodation to get all the facts before making a decision. While tenants can continue living in their current property, if they have a spare room then they do face the dilemma of having their benefits cut. But with plenty of affordable private rentals out there, there is accommodation available within their price range.”

To get a quote on Buy to Let Total Landlord Insurance, click on http://www.totallandlordinsurance.co.uk/ and receive a quick quote today.

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Natalie Crane
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