Shared Room Rates & Changes will be Enforced Earlier

Latest landlord News by: Madalena Penny

New rules were announced this week affecting the shared room rate.  The increased threshold for single room occupancy rising from 25-35 year-olds was to be introduced in April 2012 but will now come into effect 3 months earlier in January 2012.  It is understood that the earlier introduction is to bring it in line with all housing benefit caps enforced on existing tenancies in January 2012.

Housing welfare groups and housing experts alike believe that a significant reduction in housing benefit for single people within this age group living in HMO’s could face homelessness as a result of the caps.

According to housing minister, Grant Shapps, the increase in age threshold will lead to a further 88,000 extra rooms to support the change.  Last month 4 local authorities challenged the government’s introduction to HMO controls through article 4 direction.  By asking for a judicial review, the local authorities believe that the government failed to consult the appropriate planning authorities before altering the GDPO (General Permitted Development Order).

If the Authorities in question do however have their case upheld, it could mean the automatic change in classification resulting in planning permission being sought by landlords.  A consequence of this will be less HMO’s for both benefit claimants and students.

However some local authorities have been quite clever in their approach to studentification.  Brighton & Hove City Council along with Brighton University have teamed up and established a social letting scheme.  Enforcing stricter tenancy conditions to deter anti-social behaviour from students they aim to optimize distribution of HMO’s within the private rented sector.

There is still only speculation concerning the impact the caps will have on the private sector and benefit claimants when they are introduced. With an all time high in tenant-demand, benefit claimants with adverse credit history or incomplete tenant references are rejected by landlords and letting agents in favour of more professional and solvent tenants.