Freeze on LHA rates the biggest driver of poverty not the PRS!

by Property 118

8:49 AM, 12th February 2019
About 5 months ago

Freeze on LHA rates the biggest driver of poverty not the PRS!

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Freeze on LHA rates the biggest driver of poverty not the PRS!

The National Housing Federation has released a report ‘Poverty and housing in the private rented sector’, click here to view the full report.

The research concentrates on how social rent could make a difference to households living in poverty in the private rented sector with high housing costs the cause and contributor to poverty in England.

The key findings from the National Housing Federation outlines the positive impact social rent could make to households in relative poverty after paying market housing costs in the PRS. This estimates that social renting would:

  • Leave an estimated 842,351 (71%) households in poverty better off
  • Lift 315,047 households and 828,595 people out of relative poverty including 139,138 households with one or more children (equating to around 242,753 children)
  • Saving Housing Benefit payments to 502,012 households, with an estimated saving of around £50.50 households per week or an estimated collective saving of £1,783,074,042.

However, Chris Town, Vice Chair of the RLA counters this argument saying: “The biggest driver of poverty in the private rented sector remains the government’s freeze on Local Housing Allowance rates.

“Support for housing costs is simply failing to keep up with the realities of rented housing and we call on the government to use its spending review to drop the freeze.

“It is though disappointing that today’s report failed to note that the official data shows that the proportion of income spent on private sector rents is falling compared to the social sector where it is increasingly.

“Data also shows that over the last year private sector rents fell in real terms.

“In the end, the best way to ensure rents are affordable is to boost the supply of homes to rent alongside all other tenures.

“This means the government adopting a positive, pro-growth tax regime that supports and encourages the majority of good landlords to provide them.”

The English Housing Survey shows that between 2010-11 and 2017-18, the proportion of household income (including housing benefit) that private sector tenants spent on their rent decreased from 35% to 33%.

In the same period the proportion of household income (including housing benefit) that social renters spent increased from 27% to 28%.

The Office for National Statistics has reported that in the year to December 2018, private sector rents paid by tenants in the UK rose by one per cent, well below inflation.

A report for the RLA by Manchester Metropolitan University has noted that Local Housing Allowance rates are the main driver of tenancy failures in the private rented sector.



Comments

Mick Roberts

7:34 AM, 3rd June 2019
About 2 months ago

Just clearing up old emails. Yes, I second that.
Freezing LHA rates & benefits for the most vulnerable has done nothing but pushed them into more poverty.
We all know inflation has happened/is happening. And rents have increased even more so through legislation & attacks on Landlords, but to then not increase the LHA rate for 5 years to save the Govt money cause 'no one cares about the unemployed' is preposterous.

reader

11:12 AM, 3rd June 2019
About 2 months ago

When LHA was at the 50th percentile of Broad Market Average rents, tenants in my area could afford a modest one bedroom property at LHA levels.
Now LHA/UC housing costs, have moved down to the 30th percentile and have also been frozen to at least 2020 they can now just afford a one room self contained studio flat of modest size. Those under 35 that are limited to 'room rate' are further limited to non self contained basic accommodation in less desirable areas.
In fact the Broad Market Average one bedroom rent is far in excess of the LHA rate to the extent that LHA for over 35 year olds just covers quality shared accommodation.
So tenants are being squeezed down market or having to find other sources to pay their rent. This means guarantors are becoming a standard requirement for LHA/UC reliant tenants. Except of course those who cannot provide such, their plight is deeper.
The rental cost figures are published by the Valuation Office and are available for all areas of England as at 30th September 2018.

Mick Roberts

12:32 PM, 3rd June 2019
About 2 months ago

Yes my Landlord mate summed it up when having to give out rent increases. Gone are the days when HB paid the cost of your house. We're finding the 2 bed rate woman & 1 kid is only just paying enough for a 1 bed flat.


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