Housing benefit (LHA) warning issued as local housing allowance rules are changed...

[dutchman]

Rishi Sunak revealed the government’s spending review Wednesday and along with this announcement, oncoming changes for Universal Credit, state pensions and other benefits were made



Published alongside the Chancellor's announcement was the OBRs Economic and Fiscal Outlook for November 2020.

Within this report, additional insight was offered on changing local housing allowance rules, which will have an impact on certain benefit claimants.

The report said: “The increase in local housing allowance (LHA) rates to equal the 30th percentile of an area’s market rents raises UC or housing benefit awards for eligible private renters.

“At the time of the FSR the government had not specified LHA rates beyond this year, so we assumed they rose in line with CPI inflation consistent with the default policy assumptions underpinning our March forecast.

“It has now decided that rates will be frozen in cash terms from 2021-22 onwards.

“This means the £1 billion cost of the measure in 2020-21 declines to £0.3 billion by 2025-26 (and that LHA rates will fall back below the 30th percentile of local rents over time).”

These details caught the eye of the National Residential Landlords Association (NRLA) who detailed affected landlords have criticised the chancellor for cutting this support, which will harm tenants relying on benefits like housing benefit to cover their rent.

The NRLA warned the announcement represents a “kick in the teeth” for both renters and landlords struggling with the consequence of rent arrears through no fault of their own.

These changes could affect many people in the coming months as recent analysis from the Joseph Rowntree Foundation showed that around five percent (200,000) of households in the private rented sector are in arrears.

Additionally, it was revealed 30 percent of all private rented households are now worried about covering their rent in the next three months, up from 19 percent in the immediate time before the pandemic emerged.

Ben Beadle, the Chief Executive of the NRLA, commented on the announcement: “Many renters and landlords are struggling with the consequence of rent arrears through no fault of their own yet the government is failing to take the action needed to address this.

“Whilst the Chancellor has spoken about the need to support those who find themselves homeless, it would be much better for all concerned to provide the funds needed to sustain tenancies in the first place.”

[dutchman]

It's amazing how many news sources have ignored this story!