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0:06 AM, 16th June 2023, About 11 months ago 9
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Low-income renters in England who rely on benefits are finding it increasingly difficult to secure housing due to skyrocketing private rents that far exceed local housing allowance rates (LHA).
These rates, which determine the maximum amount of financial help tenants can receive through universal credit or legacy housing benefits, have remained stagnant since 2020.
Originally, LHA was designed to cover the lowest 30% of market rents.
However, recent findings from the Chartered Institute of Housing (CIH) and Shelter reveal that this is no longer the case for a typical two-bedroom rental property in England.
In fact, less than 20% of private rentals fall within LHA rates, leaving renters to grapple with an average deficit of £151 per month.
Charlie Berry, a policy officer at Shelter, said: “These huge shortfalls leave private renters at high risk of going into rent arrears and push families towards homelessness.
“With fewer and fewer affordable private rentals for people on housing benefit and a severe shortage of social housing, we are sadly left with a homelessness crisis.”
She added: “There are now more than 101,000 homeless households living in temporary accommodation, the highest number for almost 20 years.
“The evidence is clear: the Government must end the damaging freeze to local housing allowance which is leaving low-income families with nowhere they can afford to call home.”
As rents continue to climb, the three-year freeze on local housing allowance rates has only worsened the gap between these rates and actual rents.
The disparity between LHA rates and rents varies across England, with some regions experiencing a more severe shortage of affordable properties.
In the South East, particularly in areas like Eastbourne and East Sussex, less than 10% of rented homes are available at LHA rates.
The situation is even more dire in Yeovil and in Tameside in Greater Manchester, where only 7% and 5% of properties, respectively, can accommodate low-income tenants.
However, the research shows that the struggle to find affordable housing is not limited to densely populated cities in England.
In cities like Leeds and Bristol, a mere 10% of properties are accessible at these rates.
In Scarborough, north Yorkshire, only 13% of homes fall within the current rates, while just 8% meet the criteria in Bury St Edmunds, Suffolk.
The situation is even more challenging for single individuals under 35 years old seeking a room in a shared home.
In 24 out of 152 areas, just 5% or fewer rooms are available at affordable rates.
Coastal regions like Cornwall, Devon and also Dover and Plymouth, where the issue of holiday lets and second homes means there aren’t any affordable rooms to rent.
A government spokesperson said: “We recognise the pressures of rising rents which is why we have maintained 2020’s £1 billion boost to Local Housing Allowance rates which provided more than a million claimants with an extra £600 a year on average.
“We are projected to spend over £30 billion on housing support in 2023-24 on top of a significant package of support to help with rising costs, worth an average of £3,300 per household.
“For those who face a shortfall in meeting their housing costs, Discretionary Housing Payments are available from local authorities.”
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Robert M
9:48 AM, 16th June 2023, About 11 months ago
The 20% figure is ridiculous, it is more like 1% in reality. Check for yourself, look at the properties listed on Rightmove, Zoopla, etc, and I think you will be very lucky to find even 1% of advertised properties to be within the LHA rate for that area.
The distortion, up to the 20% figure, is probably due to the factoring in of existing tenancies where private landlords have not increased their rents for good long-term tenants, so although it may perhaps be true that overall 20% of PRS tenancies are at LHA rates, this certainly isn't correct for new tenancies.
I would also point out that although the LHA rate may have been frozen since 2020, those 2020 LHA rates are based on the 2019 rental figures, so the LHA rate is based on the 30th percentile of market rents as they were in 2019.
The effect of the Overall Benefit Cap (OBC) has also not been factored in to this report. The OBC means that many families will have their Housing Benefit (in most cases now the Housing Element of UC) restricted (reduced) due to the OBC not being increased in line with the benefit increases, and this results in most households (even in housing at the LHA rate) having the housing benefit part of their income reduced so that they have to "top up" their rent from their UC personal allowance (living costs).
Mark C
10:47 AM, 16th June 2023, About 11 months ago
If you believe the papers there are more stories about peoples rent going up and LHA not helping which leads to an eventual eviction, the person is then put up in a hotel, which no doubt will cost way more than paying the increase.
It's like watching Dumb and Dumber.
Paul
7:30 AM, 17th June 2023, About 11 months ago
At the moment I'm dealing with Winchester City Council in relation to a Ukrainian family. My initial question was in relation to how much I'd get paid. I was given an answer... So, I continue probing and working on this. Then yesterday, oh, we got it all wrong. It's this rate.... Alas, the person at the other end of the phone didn't seem to worried about this or even really find it too important.
The cost to the council to house a mother, two daughter and also a grandmother is a lot more than what I'm charing to put everyone into a single house.
There are LHA rates, then there is common sense.
In Dorset, I've just house a similar Ukranian family, the process was a lot easier and I pretty much the rate I was after. I'm currently fully painting and doing the house up, so it's nice for them.
I don't normally deal with LHA and perhaps I can now see why !!
Mick Roberts
8:35 AM, 17th June 2023, About 11 months ago
Reply to the comment left by Robert M at 16/06/2023 - 09:48
Well said Rob,
I was thinking same. No way does current LHA pay 20% of rents. In Nottingham, it's 0%.
Will Conway
8:59 AM, 17th June 2023, About 11 months ago
Sign and share the petition to increase LHA
https://petition.parliament.uk/petitions/636623
Deedee Phillipsa
11:25 AM, 17th June 2023, About 11 months ago
The rising cost of rents and property prices is shocking and unaffordable to many families, especially single parents who work but can't afford rent, with additional UC support and can't get a mortgage.
BTW this to rent placards are in Edinburgh 👍🏽😊🤔 where it's just as extortionate as England and full of student accommodation, air bnbs and holiday lets. Property prices have gone sky high through new developments pushing up prices which are unaffordable to locals.
Neil Robb
10:58 AM, 18th June 2023, About 11 months ago
If we look at how little lha has risen in the last 20 years it is very little .
Especially in Scotland and Northern Ireland.
Rates in Belfast single person under 35 allowance is £62.50 a week . This until COVID was actually only £42.50 a week.
Over 35 depending where to were in NI £68.00 to 83.00 a week one bed rate.
Single mum with child two bed is £98 a week used to be £93.00
Three bed £103.00 a week
Four beds was alot higher .
You can apply and may or may not get .
In Scotland the amount had gone done you used to get like £350 to £450 a month for a one bed flat .
It fell to to £68 a week. It has increased slightly.
Using the £30 billion they talk about how much of it is housing associations rather than landlords like us.
Housing associations most are charities so don't pay tax. Get loads of government support cheaper access to loans .
Paul Smith
13:23 PM, 17th July 2023, About 10 months ago
The Bank of England set mortgage affordability rules to protect banks and borrowers. These ensured affordability if rates went up by 3%. Unbelievably the Bank of England scrapped these in August 2022 "trying to hide the evidence"? The BoE have increased rates from 0.1% in December 2021 to 5% now. So mortgage tracker rates have already risen nearly 5% this is 2% above bank affordability criteria. This is 66% more than the bank though you would ever have to pay just in mortgage costs. A landlord has many costs - buying 3%, conveyancing, ground rent, council tax, void periods gas cert, electric cert, epc improvements and then he may rent the home to a tenant a home that has cost him say £140k in Lancashire. With rate rises if he borrowed the £140k he would now pay the bank alone £9,240pa in interest having more than doubled at the average 6.6% mortgage on offer. The government pay rent at just £6,880 in LHA, having not increased these rents in three years. The greedy Banks are now taking all the money, it's not clear their costs servicing the mortgage actually went up. They are giving some of the money to savers and keeping some. But the mortgage borrower is expected to pay under a false claim that this will stop inflation? How does that work? Savers have more money to spend The 63% of landlords who own their houses outright aren't affected? Most mortgage borrowers aren't affected till their fixed rates end. So the system is smashing a small number of people - maybe one to two million to pay for inflation they didn't cause. #NotOK
GlanACC
14:24 PM, 18th July 2023, About 10 months ago
I don't believe the LHA should cover all the rent. In the past before I sold 12 of my properties on average 2/3rds of them were single mother with a child or two. What I want to know is where are the absent fathers, and even though I am a landlord it is still me who is subsidising them ! By making the tenant pay at least part of the rent it focusses the mind on geting a job.