“as the Department for Communities and Local Government embarks on a programme to increase housing supply, the Department for Work and Pensions is preparing to implement policies that are certain to do the opposite.”Writing in the Guardian, Moat’s Chief Executive Brian Johnson points out that there are not enough one bedroom properties across the south east to make the proposed underoccupation policy work by 1 April 2013. CASE members would need to re-build the equivalent of 7.5% of their total rented stock as one bedroom properties to house all their under-occupying residents ‘correctly’.
Johnson observes that the proposals on under-occupation will lead to a severe shortage of the "right size" homes for people, meaning that many will begin going into debt on 1 April 2013, and comments:
“Surely, punishing people when they want to do the right thing but are unable to cannot be regarded as good public policy.”The report predicts that the introduction of direct payments to residents will significantly increase arrears. As well as the obvious detrimental impact on the tenants concerned, the associated bad debt will increase the cost of borrowing for housing associations, as lenders move to manage the increased risk, affecting the sector’s build capacity. The research suggests a loss of 106,000 potential new homes as a result of direct payments alone.
Finally, the introduction of the benefit cap means that the Affordable Rent model does not work for larger properties, and will mean a halt to the building of four bedroom homes.
The paper concludes by recommending the adoption of a number of House of Lords amendments in the final Welfare Reform Act, the scrapping of plamns to introduce direct payments and an easing of the proposed benefit cap.