Propertymark calls for an end to the freeze on local housing allowance

Propertymark calls for an end to the freeze on local housing allowance

9:36 AM, 6th April 2023, About 11 months ago 17

Text Size

Propertymark, the body for letting agents, says ‘enough is enough’ and is calling for an end to the freeze on local housing allowance (LHA) and it wants more support for renters.

The organisation’s policy and campaigns officer, Tim Thomas, made the announcement to MPs at a Westminster Hall debate covering LHA.

The allowance provides tenants with enough financial support through the benefits system to afford the cheapest 30% of housing in an area, adjusted for household composition.

However, despite interest rate and energy price rises, and with the supply of private rented homes remaining stagnant as demand continues to grow, rents have inevitably risen – but the LHA has remained static since 2020.

Propertymark says that renters on benefits are being priced out of the market.

LHA should be set at least the 30th percentile

Among supporters for the move in the debate was Hywel Williams MP and Propertymark says the LHA should be set at least the 30th percentile – if not the 50th percentile.

The allowance should also be ‘topped up annually to keep up with market rents’ and its proposals are part of Propertymark’s Spring Budget Representation to HM Treasury.

The organisation has also teamed up with organisations in Wales as part of the ‘Homes for All Cymru’ coalition which also wants to end the LHA freeze.

‘1.2% of properties in Wales were available at or below Local Housing Rates’

Mr Thomas said: “New research undertaken by the Bevan Foundation has found that only 1.2% of properties that were advertised for rent between 3 February 2023 and 17 February 2023 in Wales were available at or below Local Housing Rates.

“In total there were only 32 properties advertised on the market that were fully covered by Local Housing Allowance rates, with no properties at all being on the market at Local Housing Allowance rates in 16 of Wales’s 22 local authorities.”

He added: “This issue is being seen across the board, with recent research conducted by Crisis and Zoopla showing that just 11% of one-bedroom properties in England are affordable on Local Housing Allowance, down from 17% in April 2022.

“The proportion of affordable two-bedroom properties has fallen to just 7% from 11%, and for three-beds now stands at a shocking 6%, down from 10%.”

Member agents submit their rental data to the Valuation Office Agency

As part of Propertymark’s lobbying and stakeholder work, it has seen member agents submit their rental data to the Valuation Office Agency (VOA) to help improve rental data that reflects fair LHA rates.

Accurate rental data can also impact loans, mortgages, investments, pensions, benefits and numerous other products therefore it is essential regardless of the size of a landlord’s portfolio or of an agency.


Share This Article


Comments

Mick Roberts

11:53 AM, 6th April 2023, About 11 months ago

I don't think u will get 1 house in Nottingham for the LHA rate. And we ain't anything special or posh in Nottingham.

Average area's.
4 bed houses £1100. LHA rate £800.
3 bed houses £850. LHA rate £625.02.
2 bed houses £750. LHA rate £550.02.
1 bed flats £625. LHA rate £469.98.

radnor man

12:30 PM, 6th April 2023, About 11 months ago

Reply to the comment left by Mick Roberts at 06/04/2023 - 11:53Corr.
Wish LHA rates in Rhondda like that.
3 bed house £385.
Unsustainable for us especially with the raft of legislation costs thrown at us

Mick Roberts

12:33 PM, 6th April 2023, About 11 months ago

Reply to the comment left by radnor man at 06/04/2023 - 12:28
Wow,
Are the house prices half the price though?
3 beds Bulwell 140k 150k. Approaching 160k seems to becoming the norm.

Reluctant Landlord

12:38 PM, 6th April 2023, About 11 months ago

ditto in Birmingham . If you take a not such nice area with a lot of HMO's as a worse case scenario...

4 bed average (1400 MINIMUM as most 4 beds converted now as more profit in HMO) LHA 850
3 bed average 1200 mim LHA 674
2 bed av. 750 LHA 625
1 bed self contained flat - impossible nothing on the market - only house shares available and they are coming in at 600 plus for nice ones) LHA 525

Mick Roberts

12:43 PM, 6th April 2023, About 11 months ago

Reply to the comment left by DSR at 06/04/2023 - 12:38
Wow u worse than us. Has Birmingham got Selective Licensing?

Yes we getting shared houses now for £525 per room.
Nice 1 beds in HMO's are £600+.

Reluctant Landlord

13:12 PM, 6th April 2023, About 11 months ago

Reply to the comment left by Mick Roberts at 06/04/2023 - 12:43
SL was pushed for certain postcodes yes and it got 'approved' by the council (voted in by themselves of course!), but not heard anything since...

The postcode areas that SL will cover are the not such great areas where there has now been a ban on new HMO's too. The belief that HMO's are ruining areas (ASBO etc) so no more licences would mean that houses would be released instead. hahahah! Opposite result for a number of reasons.

1. What family would actively want to rent in an areas surrounded by existing HMO's for choice (ie private paying families either pay more to live elsewhere or go for a smaller property but nicer area).
2. With the LHA capped at 674 for a 3 bed and 850 for a 4 bed, those LL's who have properties are either keeping low rent for existing tenants (just to keep them in there) or are leaving them empty when existing family move out. LL's are buggered if they are going to let to benefit tenants who they know wont be able to afford the top ups/retain the rent and risk the place being trashed as the SL police (Bham council 'offer' a financial 'incentive' if you take on someone on their list but do not guarantee the rent and the min contract is 1 year)
3. LL's sell up. These wither go into private hands (not rental) or to other unscrupulous owners who are willing to run the gauntlet and let rooms illegally without any licencing etc.. They wont pay for SL so property remains 'unseen'.
4. The house remains empty so no SL fee applicable and noone housed
5. Housing associations COULD offer to take your house off you, but even they cant get HMO licencing so they wont take your property on.

Complete council cock up.

radnor man

15:00 PM, 6th April 2023, About 11 months ago

Reply to the comment left by Mick Roberts at 06/04/2023 - 12:33
3 bed in reasonable nick, 90k/110k in lowest valua area.

Mick Roberts

15:44 PM, 6th April 2023, About 11 months ago

Reply to the comment left by radnor man at 06/04/2023 - 15:00
So u hard done to then at them values.

Mick Roberts

15:45 PM, 6th April 2023, About 11 months ago

Reply to the comment left by DSR at 06/04/2023 - 13:12
Let's hope u don't get SL then, it's your worst nightmare. The cost is the least concern.

northern landlord

15:51 PM, 6th April 2023, About 11 months ago

Just looking at advertised rents in Rochdale. This is how it works out
2 Bed Average £731 30th Percentile £657 LHA rate £450.02
3 Bed Average £1013 30th Percentile £887 LHA rate £548.51
So it’s pretty obvious that the LHA rate (which is supposed to meet the 30th percentile figure) is totally inadequate.
I just looked on the main sites used by rental agencies so I can’t claim to have found everything that was for rent as there is some word of mouth rental market going on in Rochdale with cheaper rents (cheaper for a good reason) but there were only 19 two bed places advertised and 11 three bed places and this in a borough of over 200,000 people. Shows you the state of the "proper" rental market. Upping the LHA to the 30th percentile would mean that only about ten additional benefit tenants would be housed, unless the move encourages more landlords to enter the market, which in my view is doubtful.

1 2

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now