The coalition’s ‘bedroom tax’ will take effect in April, affecting social housing tenants across the country.
The tax is aimed at reducing under-occupancy of homes across the UK. If a house or flat is under occupied by one bedroom, a 14% deduction will be made from housing benefit. Under-occupancy of two bedrooms will lead to a 25% deduction.

Affected tenants will then need to decide if they can afford the shortfall – or alternatively live in a smaller place.
Critics argue that it will either reduce already squeezed household budgets by impacting housing benefit, or force families to move into smaller homes, potentially away from friends and family. There are also concerns that there is not enough of the right capacity housing stock available to meet the demands of mass downsizing, particularly one bedroom accommodation.

Proponents of the scheme say it will encourage more of the available housing capacity to be used by the population, with fewer bedrooms standing empty. As far as government finances are concerned, there may also be a reduction in the national housing benefit bill, since over-occupying claimants will not be paid the full amount.

From a landlords’ perspective, those already in the rental market may see a reduction in demand as more people choose to rent out spare rooms in an effort to side-step the bedroom tax.

The changes will no doubt be of interest to many of our landlord, property and buy to let insurance customers. What is your opinion of the bedroom tax? Feel free to leave your comments below.