Finance News

Housing group moves to get around tax

Em Morley - November 24, 2015

A housing group has devised a controversial method in trying to get around paying the Bedroom Tax.

Cobalt Housing, from Liverpool, has started knocking down walls in their properties in order to create ‘smaller’ homes.

Falls

The group says that since the Tax was introduced, demand for many of their properties has dropped.

With 70% of the groups’ 6,000 properties being three-bedroom homes, they are now moving to convert these into two-bedroom houses in order to fill empty properties.

Managing Director of Cobalt, Alan Rogers, told the Liverpool Echo that his firm was struggling as people either couldn’t afford homes or did not qualify, with children under 10 expected to share rooms.

Rogers noted, ‘empty properties in the area present a problem for us as they are open to vandalism and they quickly become uncared for and derelict. If people saw loads of tinned-up properties, they wouldn’t buy and we don’t get income from empty properties.’[1]

Housing group moves to get around tax

Housing group moves to get around tax

Costly

Conversions of the properties cost between £700-£800, with this figure expected to rise to £1,300 next year as other improvements are carried out.

To date, Cobalt has completed conversions on 83 properties, with plans outlined to covert another 120 three-bedrooms properties to more spacious two-bedroom homes.

Mr Rogers said that the tax was unfair, stating, ‘the problem with the Bedroom Tax is that it is retrospective, it isn’t fair as it affects people who didn’t expect it when they signed a tenancy. The rent will be less but it is sustainable outcome as the houses will be let.’[1]

‘We are looking to find other ways to make housing affordable such as doing away with pre-paid meters, ‘ he added.[1]

Short-term

Rogers went on to explain that houses in the Norris Green area were only providing short-term housing for people following the cuts. He stated that, ‘people now have difficult choices to make, like whether to pay their rent, their bills or food. We want to get a better dwelling mix-different sizes of families and backgrounds-to create a community and once people move into their homes, we want them to stay.’[1]

‘We have got demand, we have let our homes, but we have lost money. It is not going to be the solution for everyone but it is about supporting who we can,’ he concluded.[1]

What are your views on this controversial move?

[1] http://www.mirror.co.uk/news/uk-news/housing-association-beats-bedroom-tax-6878308