Benefits win a gamechanger for vulnerable tenants – and the landlords who house them
Following a tireless campaign by the NRLA Chancellor Jeremy Hunt has this week announced he will reverse the unfair freeze on Local Housing Allowance (LHA) rates.
The association has been lobbying for change for a number of years with the call a key part of the NRLA’s submission to the Treasury ahead of this week's Autumn Statement.
What has been announced?
LHA rates are used to calculate the amount of housing benefit a claimant is paid under Universal Credit, however the rate has been frozen in cash terms since April 2020, despite real-world rents for new lets increasing by more than a fifth since then.
During the Autumn Statement Jeremy Hunt confirmed he will be increasing the LHA to the 30th percentile of local market rents, meaning renters’ benefits payments will reflect rents changed in the lowest third of the market – opening up the number of homes available to them.
Vital support
Earlier this year NRLA Chief Executive, Ben Beadle, told the Work and Pensions Select Committee that the Local Housing Allowance freeze has been ‘disastrous’, with Policy Director, Chris Norris, using a fringe event at the Labour Party Conference to describe the freeze on housing benefit rates as a ‘travesty’.
Reacting to the news this week, Ben said: “We warmly welcome today’s announcement by the Chancellor, which follows extensive campaigning by the NRLA and other others.
“Freezing housing benefit rates was always a disastrous policy, hitting as it did many of the most vulnerable tenants across the private rented sector.
“Taking steps to reverse this change will provide vital support for tenants who are in receipt of the LHA, who will now be able to access and sustain rental tenancies. More generally, this will go a long way towards tackling homelessness across the UK.
“All parties now need to commit to ensuring housing benefits are uprated each year so that they continue to be linked to market rents.”
When will change happen?
According to the announcement the change will be introduced at the start of the new financial year, in April 2024, with the realignment likely to be based on September 2023 market rents. It also freezes LHA rates again from 2025/26 onwards, something the NRLA will continue to challenge.
What else was included in the Autumn Statement?
Other key takeaways for landlords included the announcement that Universal Credit will be uplifted by 6.7% in April 2024 and that Class 2 National Insurance contributions will be abolished, saving the average self-employed person around £350 in 2024/25.
Jeremy Hunt also revealed plans to remove planning red tape to speed up the decision making process and the introduction of new permitted development rights for the conversion of a single dwelling into two flats.
The NRLA was disappointed there was no further announcement on tax changes affecting landlords and will continue to campaign for pro-growth measures to tackle the supply crisis in the sector.
Keep an eye on our news site for more detailed analysis of today’s announcements.
More information
To read more about the NRLA campaign on welfare click here.
The NRLA also runs a course for landlords that rent to tenants in receipt of Universal Credit. To find out more click here.
