Cutting the spare room subsidy is already delivering results

The cut in the spare room subsidy has started to have an impact. It applies to 386,000 properties in social housing which are under occupied. Those living in them will have to pay increased rent. If they want to carry on living in a property with a spare room the Housing Benefit will not cover the full rent.

A recent BBC report said that so far 80 out of 3,000 in North Manchester had downsized. That is good news for at least some of the 249,000 families in overcrowded social housing. A report by the National Housing Federation, the lobby group for housing associations, examines the impact in Merseyside. They claim that in the first month 155 households downsized into social housing out of 26,466 facing a spare room subsidy cut.

So does that mean that the policy is a damp squib? No. Many will not have planned in advance, and will only be doing so now that the impact is apparent. Even if it does mean, say, only 10,000 or 20,000 larger properties are freed up, that will not be a trivial matter for those who are in the worst overcrowding, and thus are the highest priority. They will be the beneficiaries.

However, I suspect that over time we will see many more properties freed up. A survey of housing association tenants by the Housing Futures Network suggested that 25% would be likely to downsize to another property. Furthermore, many others said they would get into arrears. But that can only be temporary - it is simply a way of delaying facing up to new circumstances. So I expect the number of properties to be made available to be significant. It will probably mean that very many families - perhaps over 100,000 - currently suffering from the worst overcrowding getting more space. Is that not a matter for celebration?

It is also true that there are alternatives. The survey also found that:

Twenty-nine percent would be quite/very likely to seek to earn some or more money via work to cover
the rent. Households already in employment or claiming Job Seeker’s Allowance were more likely to
consider this an option.

Does anyone think that is a bad thing? The Labour Party? Those professional, taxpayer funded, whingers at the National Housing Federation?

Another 15% would seek a lodger - often a family member - to take the spare room. Again this is positive. Choice and competition in the private rented sector will help to improve mobility and lower rents.

The good news is that while the NHF indulges in agitprop, many housing associations are forgetting about the politics and are making a practical effort to make a success of the new opportunities. The South Liverpool Housing Group has been running a a special eight week training programme to help those affected find work. Other housing associations have helped set up websites for home swapping such as House Exchange and Home Swapper. By contrast Your Homes Newcastle are trying the personal approach with Swap It events - those facing higher rents have a chance to meet those who are overcrowded. 1,500 have expressed an interest in exchanging.

In my own borough of Hammersmith and Fulham the spare room subsidy cut has so far meant 70 council properties being freed up, offering relief for overcrowded families. Another 241 households are currently in the process of downsizing from council properties with spare rooms.

This is a good reform. It will encourage work, improve the housing supply, and reduce overcrowding. The benefits have only just begun.