Around 900,000 people across the UK could see their housing benefit payments increase by around £120 a year from April after the government yesterday announced that it is lifting the freeze on Local Housing Allowance (LHA) rates, which has been in place since 2016.
The decision means that payments, which are based on private market rents being paid by tenants in the broad rental market area (BRMA) - within which a person might reasonably be expected to live - will rise by inflation, which currently stands at around 1.5%, from the start of the new tax year.
A freeze on LHA rates was introduced in 2016 by then-chancellor George Osborne, replacing the existing regime which saw LHA rates broadly cover the cheapest third of rents within the government’s BRMA.
John Stewart, policy manager for the RLA, commented: “The benefit level needs to reflect the realities of the level of rents locally.
“Given rents have risen by an average of 5%, and in some areas more than that over the past four years, a rise of 1.5% in the benefit level is not going to be much help to a tenant struggling to afford the rent in those areas and many others.
“If it really wants to help tenants, the government should restore the direct link between rent levels and the LHA instead of a paltry flat rate increase.”
The change will affect around 1.4 million private renters who receive LHA, which is determined by the Valuation Office Agency.
But many analysts believe that an additional £120 a year, or £10 a month, is simply not enough to help those already unable to afford their rent.
David Cox, chief executive, ARLA Propertymark, said: “When LHA was first created it allowed low-income families the ability to afford half of all private rented sector accommodation. However, due to successive cuts and the freeze, this number has dropped to less than 10% in most parts of the country.
“While any increase is welcome, this uplift does not go far enough. Ultimately, the government has missed an opportunity here to really help vulnerable and lower-income tenants.”
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Woooooo Hoooooooo 2quid a week.....lets have a party. I won't be rushing back to deal with LHA tenants and their multitude of "challenging" problems anytime soon. Our days of dealing with them finished many years ago.
should be abolished
This simply demonstrates once again that HMG is not in touch with the challenges faced by Landlords or Agents. Contrary to the well peddled stereotype that led to a ban on the portals allowing adverts saying "no DSS", most agents will not accept LHA tenants due to the clawback if a tenants eligibilty changes after the rent has already been paid to the Landlord.
If that rent has been paid via the lettings agent they are responsible for paying it back to HMG even though it may have entered and left their account the same day. There is almost no chance of recovering the monies from the tenant or landlord, so the Agent just has to take it on the chin. After my first clawback many years ago, the following day, I stopped renting to LHA tenants, I couldn't expose the business to that kind of risk.
Most are false Claimants and shouldn't be getting it anyhow, you have destroyed a whole young generation encouraging them to adapt their lifestyle to suit the benefit system, once it has taken hold they can't live without it, how many more lives are you going to destroy, its like a disease, pushing bogeys and sitting around coffee bars trying to waste the day getting fatter.
A fart in a can!
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