NRLA and Generation Rent welcome call to uprate LHA

NRLA and Generation Rent welcome call to uprate LHA

9:46 AM, 21st March 2024, About 4 months ago 1

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MPs on the Work and Pensions Select Committee say that Local Housing Allowance should be uprated every year by the Government so that it retains its value at the 30th percentile of rents in a rental market area.

LHA rates have been frozen since April 2020 and from April this year, the LHA rate will once again cover the bottom 30% of rents in any given area.

In its report, the Committee says: “The evidence is clear that support for housing costs cannot be viewed in isolation from wider support provided through other benefits.

“When and if claimants experience a shortfall in rent, this can impact other parts of household budgeting and erode income otherwise intended for daily living costs.

“The Government should make a commitment to uprate annually Local Housing Allowance so that it retains its value at the 30th percentile of rents in a Broad Rental Market Area (BRMA).”

‘Committee’s call for housing benefit rates to be reviewed annually’

The chief executive of the National Residential Landlords Association (NRLA), Ben Beadle, said: “We welcome the Committee’s call for housing benefit rates to be reviewed annually in line with housing costs.

“This has been a longstanding call by the NRLA and others.

“Too often the housing benefit system has left tenants and responsible landlords not knowing if rents can be covered from one year to the next.

“What should be a safety net has become a source of frustration and anxiety.”

He added: “All parties need to provide certainty for those reliant on benefits that they can keep a roof over their heads by ensuring rates permanently remain linked to market rents.”

New private rental properties listed on Zoopla

The Institute for Fiscal Studies (IFS) has noted that since LHA rates were frozen in April 2020, the proportion of new private rental properties listed on Zoopla that are affordable for those in receipt of the LHA has fallen from 23% to just 5%.

The IFS also notes that when the rate is unfrozen there will be more than 800,000 households on universal credit will continue to face shortfalls between their housing support payment and the rents they pay.

At present, housing benefit rates are set to be frozen again from next year.

‘This recommendation is very welcome’

The chief executive of Generation Rent, Ben Twomey, said: “This recommendation is very welcome and guaranteed support for renters in need is long overdue.

“Certainty for people receiving Local Housing Allowance means that the situation of the last few years, where these benefits remained frozen while rents soared, would not be able to be repeated.

“Generation Rent have been campaigning on this issue for a long time and are glad to see that reflected in the committee’s report.

“We urge the government to adopt these findings at the earliest possible opportunity to reduce homelessness and mend the broken safety net for those in need.”

He added: “However the reliance on LHA is a concern and leads to the government effectively subsidising sky-high rents and putting money straight into landlords’ pockets.

“This change must come with a commitment to address the cause of this issue.

“The government must slam the brakes on soaring rents to give renters the breathing space we need during the cost-of-living crisis.”

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18:07 PM, 21st March 2024, About 4 months ago

It won’t ‘cover the bottom 30% of rents in any given area’.
The data that underpins LHA Rates relates to rents in the 12 months to 30th September but isn’t payable until April of the following year. By the time it’s paid, it’s already 6 months out of date. Normally, this wouldn’t be significant but landlords are playing catch up with high inflation and it is significant this year.
Is the government saying that housing benefit and Universal Credit claimants should only occupy the cheapest properties?
Tenants are paying to top up their rent from other benefits. Money intended to help with a disability is being used to pay rent because LHA is not sufficient. When LHA rates are frozen, the top up required becomes more and more expensive.

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