The upcoming welfare reforms are already leading to local councils having to change certain policies so that they can still afford to help the most vulnerable families even though they will be receiving less funding from the government. Swindon Council have announced that after the welfare reforms they will only be receiving £11 million a year from the government, which is two million pounds less than what they are receiving now. In order to make up the difference they have therefore decided to change their policies concerning unoccupied properties and council tax.
Currently, those that own unoccupied properties are exempt from paying council tax, however after the new reforms come in they will only be exempt for six months. After this time, the council will charge fifty per cent council tax for the next three months, and then one hundred per cent from then on. Furthermore, houses that are furnished and that have been unoccupied for over two years will be charged 150 per cent council tax, which combined with the cost of landlord insurance could lead to landlords losing money.
Discussing the decision, cabinet member for finance, Councillor Mark Edwards said: “If you have got people with empty houses sitting there and doing nothing, and you’ve got people crying out for houses, we have got to find a way to close that gap. I certainly think it will be the case that people think twice about leaving property unfurnished if it’s going to cost money.”
“It will put people off from people keeping the houses and trying to rent them out to people who aren’t on benefits. Some people state in advertising ‘No DSS’ and they have to wait a long time. It will affect them. If you have got a property to rent and it goes empty, you are talking at least three months empty – that’s people who don’t take on benefits people.”
However, the co-owner of Charles Harding valuers and estate agents in Old Town, Jon Harding, thinks it will be extremely difficult for the government to monitor how long houses are unoccupied and how much council tax each landlord should pay. He said: “I don’t think it will impact on the market as such. Obviously it makes it very difficult for the council to account for all of that. I think they’re making a rod for their own back.