Chancellor cuts housing support

Chancellor cuts housing support

16:31 PM, 25th November 2020, About 6 months ago 6

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The NRLA has criticised the Chancellor, Rishi Sunak, for cutting the amount tenants relying on benefits will be able to claim to pay their rent.

According to a report by the Office for Budget Responsibility published alongside the Spending Review today the Local Housing Allowance will be frozen in cash terms from next year. This means that the rate will fall below the current level which is set to cover the lowest 30% of rents in any given area.

The National Residential Landlords Association is warning that the announcement represents a kick in the teeth for both renters and landlords struggling with the consequence of rent arrears through no fault of their own.

The current rate was set in April to help renters whose incomes had been affected by the pandemic to meet the cost of their rents. A recent analysis by the Joseph Rowntree Foundation suggests that five per cent (200,000) households in the private rented sector are in arrears. 30% of all private rented households are worried about paying their rent in the next three months, compared to 19 per cent immediately pre-COVID-19.

The vast majority of private landlords have done everything they can to support struggling tenants. However, given that most landlords are individuals and not property tycoons it will become increasingly difficult to keep affected tenancies going without adequate financial support to pay off rent arrears.

Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “Many renters and landlords are struggling with the consequence of rent arrears through no fault of their own yet the Government is failing to take the action needed to address this.

“Whilst the Chancellor has spoken about the need to support those who find themselves homeless, it would be much better for all concerned to provide the funds needed to sustain tenancies in the first place.”



Comments

by Mick Roberts

9:41 AM, 26th November 2020, About 6 months ago

What no one is explaining:
Are we froze from April 2021 at the current rates? ie. Are the tenants not getting an inflationary increase?
As the press release from whoever started this off, suggests a cut to current rates. I think I get it, its froze & words which would have made sense to normal Bulwell people like me, to say 'This means Won't keep up with rising inflation & rising rents.
Ad the press release says 'will fall below the current level which is set to cover the lowest 30% of rents in any given area'. Which to me implies 'Is there a fall coming?'

And even thicker people than me could think is the 30th percentile being cut?

by Prakash Tanna

10:26 AM, 26th November 2020, About 6 months ago

Well this is no good news at all, but was expected I guess. From what I am reading and understand (BUT ... someone please correct me if I am wrong, which hopefully I am!!), the LHA rates will be frozen in cash terms from April 2021 which will equate to lower LHA rates being paid then is currently awarded. What I am unclear about is will that apply to all new claims only or will existing claims have their rates cut too? If so, like many landlords, tenants will fall into rent arrears as the LHA award may no longer cover the existing rents agreed. That leaves one of three choices, lower rents, have the LA step in and award DHP or tenants fall into arrears and a decision has to be made whether to evict !!!

by Bill irvine

13:02 PM, 26th November 2020, About 6 months ago

Reply to the comment left by Prakash Tanna at 26/11/2020 - 10:26Hi
What it means is, the LHA rate introduced in April 2020 is being frozen at that level and will still apply during April 2021 - March 22.
You may recall, when the announcement was made in March, the Government said it was only to be a temporary measure. However, in, or around July, Theresa Coffey, Work & Pensions Secretary, confirmed it was permanent, as I predicted it would be, at the time.
What happens after 2021/22 remains to be seen. Much will depend on how the economy is doing but I wouldn't be surprised if it remains frozen for at least a further year. Hopefully, my prediction will prove to be wrong!
Bill

by Prakash Tanna

13:15 PM, 26th November 2020, About 6 months ago

Reply to the comment left by Bill irvine at 26/11/2020 - 13:02
Hi Bill, Thanks for clarifying that. The rates increased significantly in April due to Covid19. Personally, I'm happy with them remaining at these rates, as long as they don't go down. We had a 4 year freeze before that and the scheduled increase in April 2020 was barely 2.2% from memory. The Covid19 increase was in the region of 20% in some areas.

by Bill irvine

13:19 PM, 26th November 2020, About 6 months ago

Hi Prakash

I'm sure most landlords would share your view that a freeze is much better than what could have happened, given the current environment.

Bill

by Mick Roberts

15:47 PM, 26th November 2020, About 6 months ago

Reply to the comment left by Bill irvine at 26/11/2020 - 13:02
Thanks Bill for clarifying. DWP Govt should just ring u up & say Bill How should we word this cause we talk jargon & confuse people the way we speak.


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