Hunt’s dramatic Local Housing Allowance move not enough for activists

Many have welcomed the move by Chancellor Jeremy Hunt to unfreeze the Local Housing Allowance - but some tenant activists say it’s not enough.

Hunt used his Autumn Statement yesterday to reveal that the LHA would be increased next year to the 30th percentile of local market rents - as requested by numerous landlord and lettings agency groups. It had been frozen for three years.

Hunt says this will help some 1.6m households currently renting in both the private and social housing sectors and is equivalent of some £800 per year per household receiving LHA.

However while Ben Twomey - chief executive of Generation Rent - admit this will help the one in three private tenants who rely on benefits to cover their rent, he adds: “Not all renters will get the support we need from this announcement - families caught by the benefit cap won’t get an extra penny - and tenants who need to find a new place to live will still struggle to afford current market rents, which have risen much faster than even the new LHA rates. 

“That means that if your landlord evicts you, you could still face having to go to the local council for homelessness support. We need more action from the government to reduce the number of evictions, build more homes in places people want to live, and to make sure that Local Housing Allowance keeps up with rents, rather than being frozen yet again.”

The chief executive of housing charity Crisis takes a more supportive tone. 

He says: “The announcement to increase housing benefit is, in the short-term, the single biggest step the Chancellor could take to prevent and end homelessness for tens of thousands of households. Some 1.8 million private renters currently receive housing benefit in England alone, yet our research with Zoopla shows that just five per cent of properties in Great Britain are affordable to them. 

“We’re pleased the Chancellor has finally listened to calls from the homelessness sector and councils and taken action to prevent more hardship.

“The three-year freeze on housing benefit has had devastating and far-reaching consequences, with people on the lowest incomes being completely priced out of renting. At the same time, we now have over 100,000 households in England alone trapped in temporary accommodation, while the number of people sleeping rough is climbing fast. Many councils are on the verge of financial collapse trying to cope with the demand.

“While the Chancellor’s decision to tackle homelessness in the short-term is a positive step, there is no room for complacency. The next UK Government must sustain this investment, otherwise we will see homelessness rise again.”

A summary of the Chancellor’s Housing-related measures announced in his Autumn Statement: 

The Local Housing Allowance is to be increased next year to the 30th percentile of local market rents, as requested by numerous landlord and lettings agency groups. Hunt says this will help some 1.6m households currently renting in both the private and social housing sectors. It's the equivalent of some £800 per year per household receiving LHA, he says.

The government-backed 95 per cent Mortgage Guarantee Scheme has been extended until the end of June 2025 - 18 months longer than previously agreed.

On planning, there will be consultation on a change to Permitted Development Rights to allow any house to be converted into two flats, so long as there is no change to the external appearance.

Households close to new electricity infrastructure (pylons and sub-stations) will receive up to £1,000 per year off energy bills.

Additionally, Hunt says that from 2024 local authorities will be able to recover the full cost of large-scale planning applications in return for a guaranteed date for a planning decision.

Business rates 75 per cent relief for retail, hospitality and leisure sectors extended until 2025.

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Other non-housing measures announced include:

- Employee National Insurance cut by 2.0 per cent to 10 per cent, helping 27m employees with an average salary saving £450 - this is introduced from January 6 2024;

- Class 2 National Insurance payments by self-employed to be abolished, saving the average self-employed person £192 a year - Class 4 NI for self-employed cut from 9.0 to 8.0 per cent from April, saving £150 per self-employed person;

- Universal Credit and other benefits to rise from April by 6.7 per cent;

- Core inflation predicted to fall to 2.8 per cent in 2024, then the 2.0 per cent official target in 2025 (this is a slower decline than previously anticipated);

- All alcohol duty frozen until August 2024;

- Triple lock to be honoured in pension payments - state pensions to rise by 8.5 per cent in April;

- Reduced business tax burden by up to 25 per cent by making large-company 'Full Expensing' permanent for those investing in the UK;

- £4.5 billion over five years to be invested in strategically important industry sectors including green technology and pharmaceuticals; 

- £50m over two years to pilot ways to increase apprenticeships in key sectors;

- £500m for the development of AI and supercomputer innovation;

- Expanded investment in Freeports and Investment Zones, including further zones in Wales, the Midlands and Greater Manchester;

- Reform for long-term sickness benefits to encourage job-seeking and working from home, with mandatory work-placements after 18 months in some cases;

- National Minimum Wage to rise £11.44p an hour, which is a 9.8 per cent rise;

- £7m for organisations to tackle anti-semitism in schools and universities.

* Remember - the Chancellor’s speech is only part of the Autumn Statement. The substantial details published in writing afterwards often reveal important changes which are only unravelled in the coming days *

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