Unfreeze the Local Housing Allowance to cover average rent

Unfreeze the Local Housing Allowance to cover average rent

11:05 AM, 1st April 2022, About 2 months ago 5

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Over half of private tenants relying on Universal Credit to pay their rent have a shortfall between the amount they receive and what they pay for their housing. It comes a year after the Government froze housing benefit rates.

Official data suggests that 56% of private renters relying on Universal Credit have an average gap of £100 a month between the amount they receive in housing cost support and the rents they pay, reports the National Association of Residential Landlords (NRLA).

Almost 60% of renters with two children relying on Universal Credit to help pay their rent have a shortfall between their rent and the benefits they receive.

Regionally, the proportion of tenants affected ranged from just over 40% in London (although based on a much higher number of claimants) to over 68% in Wales.

The Local Housing Allowance is used to calculate the amount tenants can receive to support housing costs as part of a Universal Credit payment. In response to the pandemic, the Government lifted it in April 2020 so that it covered the bottom 30% of private rents in any given area. In April last year the rate was frozen in cash terms.

As a result of the freeze, housing benefit support is no longer linked to current rents. It means the number of properties that private renters in receipt of Universal Credit can afford will steadily decline.

New data this week suggests also that over half (53%) of adults who rent their home reported that they could not afford an unexpected expense.

This is happening despite private rents across the UK having increased by far less than inflation.

The NRLA is calling on the Government to unfreeze the Local Housing Allowance to cover average rent.

Ben Beadle, Chief Executive of the National Residential Landlords Association, said:

“It is simply absurd that housing benefit support fails to reflect the reality of rents as they currently stand. All the freeze is doing is exacerbating the already serious cost of living crisis.

“The Chancellor needs to listen and respond to the concerns of both renters and landlords and unfreeze housing benefits as a matter of urgency.”



Comments

by Luke P

12:06 PM, 1st April 2022, About 2 months ago

Cheeker bleeders are Govt. putting a freeze on in the first place!

I suspect their thinking was to stop us greedy landlords being able to increase rents...yet it is they -the Government themselves- that influence the cost of literally everything else beyond private rents. LLs don't just suddenly decide they want increased profits, rather have to keep up with inflation and meet the ever increasing regulatory burden as well as shoulder poor service from the avenues of redress, such as an ever-backlogged Court system.

by Mick Roberts

10:40 AM, 2nd April 2022, About 2 months ago

Reply to the comment left by Luke P at 01/04/2022 - 12:06
Yes Luke, tenants look to us when it ain't going right & they don't understand when we tell 'em Conservative Govt don't like Benefit tenants & get votes from the workers if they punish the Benefit tenants.
I can only go on so long charging some tenants £500pm when surrounding rents are £850pm.

by JamesB

14:29 PM, 2nd April 2022, About 2 months ago

I have given a s21 to my benefit tenants of the last 12 years. There are a few reasons but mostly it is financial. LHA is £1375. I haven't put their rent up for years but have to now (I have my own family to support and inflation is massive). The tenants struggle to find £25pcm to add on top for the current rent and that was before energy price rises. If they leave I could let the hosue for £1800pcm tomorrow. I don't like doing this but I am not sure why I should be subsidising them for £5000 a year? The government should either give them the going rate, or be clear that their policy is to make people to move to cheaper areas.

by DSR

18:12 PM, 2nd April 2022, About 2 months ago

Reply to the comment left by Mick Roberts at 02/04/2022 - 10:40
i am in exactly the same position as you Mick. I am thinking of upping the rent on one flat to the just below market rate by say £75pcm. I know tenant wont like it (and of course does not have the money to pay) and of course I don't want to do this anyway BUT...just to prove the point its tempting.

Why? let me explain...

I want the tenant to argue this increase is 'unfair' and take it to a rent tribunal - what they hell are they going to say? no? Not a chance its market rate. I will pass this info to the Council and make them aware of how this will apply to all the other tenants should I do the same....

The result is the tenant will have to ask for a DHP to help meet the additional top up of £75 as tenant cant afford and will be at risk of eviction as inevitable rent arrears will accrue (eg rent is £500, HB paying 450, tenant paying 50. I put rent up to 575 (£50 just below market rate).
Will Council pay the £75 top ups per month - or will the say no so I have to evict the tenant? If so, the Council will have to put them up in very expensive Emergency accommodation (if they meet the criteria to be offered it) or are they going to actively ensure that this person is put on the street?

by Mick Roberts

5:53 AM, 4th April 2022, About 2 months ago

Reply to the comment left by DSR at 02/04/2022 - 18:12
Yes DSR, what u say there is what we wish all our tenants would do, then some Media Outlet pick up on it & say
There is a load of good Landlords out there that are charging their tenants WAY BELOW market rent cause the Govt ain't paying appropriate rates & the tenant can't afford the shortfall.
So Landlords ain't that bad, but they can't keep doing this, they din't set this up to be a charity.

That's a very good idea if we can go through with it, getting the tenant to go to rent tribunal to justify the rent. I have 3 DHP's at moment, & it's a laborious process every 6 months to get it through as u know.
And yes, it's a shame the homeless side don't work more closely with the DHP side & say if u/we don't pay this DHP of £100pm, it's gonna' cost a LOT more if we have put 'em in hostel.
And that's without even asking 'em to link up & talk with Govt & the Council Selective Licensing side. If they all spoke to each other & understood what each was doing, we'd have easier life, more Landlords would come back & take them, tenants would have more choice & rents may reduce with the larger supply.


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