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

by Property 118

8:49 AM, 12th February 2019
About 2 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.


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