With 90,000 families facing poverty due to LHA rates now is time to lift the freeze

A new study claims 90,000 families will be pushed into poverty by the Government’s decision to freeze Local Housing Allowance (LHA) rates.

More than 1.5 million households renting privately in Britain receive Universal Credit with support for their housing costs, known as the Local Housing Allowance (LHA), included.

However, an analysis of Government data by the NRLA last year showed two thirds of claimants were experiencing a shortfall between their LHA payment and their monthly rent.

A freeze on LHA rates, which had been put in place in 2020, was lifted last year, however as of April this year rates will, yet again, be held at the same levels indefinitely.

The new report, from the centre-left think tank, the Institute for Public Policy Research (IPPR), has made a range of drastic recommendations to the Government when it comes to the private rented sector (PRS), which it claims will help address the issue.

These include:

• Reducing the number of upfront checks for prospective tenants.
• Providing additional support for local authorities to enforce the Decent Homes Standard.
• Introducing an English housing tribunal in line with Scotland.
• Considering the economic and social case for rent stabilisation measures

It has also called on the Government to restore Local Housing Allowance rates to the 30th percentile of rents in each local area and ensure that future increases are ‘locked in’ to align with rent increases.

The NRLA agrees that the new freeze should not happen, and that LHA rates should be pegged to market rents; however, it does not agree that the recommendation will help address access to the PRS for lower income tenants

NRLA Policy Director Chris Norris said: “With the best will in the world reducing the number of checks tenants need to go through before moving into a property will do nothing to tackle the real issue here, which is affordability.

“Pre-tenancy checks are for the benefit of the landlord and the tenant; and allowing someone to take on a tenancy they cannot afford to sustain isn’t fair to either party.

“Nor is affordability an issue that is unique to the private rented sector.

“We know that rent controls don’t work – with Housing Secretary Angela Rayner on record as saying such a move would ‘restrict housing supply, which does not help anyone’.

“The real issue here is the supply of affordable housing and benefit levels which put suitable homes in reach of families in receipt of benefits and we will continue to campaign for the lifting of the new freeze to ensure this happens.

More information

• For more information on the NRLA’s welfare campaign click here.
• The award-winning NRLA Training Academy offers courses to support those letting to tenants in receipt of benefits. To find out more click here.
• We also have a guide to support landlords in navigating the benefits systems and supporting tenants, which can be accessed here.