Jeremy Hunt’s Budget must tackle the cost of living for renters in the red wall

The NHC has therefore used our Budget representation to call on the chancellor to announce at his Budget that he will reset LHA to cover at least the 30th percentile of local rents, so tenants who receive LHA have access to the bottom 30% of the market. This benefit must then continue to reflect the real cost of renting in future years.

This is particularly important for the North, because while rents fell marginally across the UK during the pandemic, they increased across all three Northern regions, with the highest increase in the country in the North East. 

Rents have continued to rise across all three Northern regions since LHA was frozen, and these increases have accelerated over time. Big gaps are now emerging between real rents and the support available through LHA, which reflects where rents were in local markets back at the beginning of the pandemic in 2020. Shelter has warned that rising rents in the North mean that the LHA freeze “is already having a much greater impact on households in these areas”.

“Just 7% of rental properties advertised across the North are now affordable for someone reliant on LHA to pay their rent”

In Wakefield, a ‘red wall’ seat gained by Labour from the Conservatives in a by-election last year, private rents have risen so quickly that families now face a larger cash shortfall between real rents and frozen benefits than renters looking for equivalent homes in the chancellor’s own Surrey constituency.

For a three-bedroom family home to rent in Wakefield, the gap between real rents at the 30th percentile (as determined by the government’s Valuation Office Agency) and the frozen LHA is now £23 per week. That’s almost £1,200 per year, which families have to find from income that’s meant to cover their other living costs – including higher energy and food bills. The current freeze on support for housing costs effectively undermines the chancellor’s decision to uprate other benefits.

Families can look for cheaper housing. But this is scarce. Analysis for the NHC’s Northern Housing Monitor shows that just 7% of rental properties advertised across the North are now affordable for someone reliant on LHA to pay their rent. The Joseph Rowntree Foundation estimates that over half of private renting households across the North are on low incomes. Put simply, there are a lot of households chasing a small number of affordable properties.

The ability to access property that is currently available to let is of course particularly important to our local authority members, who since 2011 have been able to discharge homelessness duties to the private rented sector. They tell us the continued freeze on LHA is resulting in homelessness presentations and driving up the use of temporary accommodation, which is precarious for households and costly for the public purse. 

“The long-term solution to this crisis is more affordable housing – but in the meantime people are struggling and the pressures on councils are increasing”

We’re in a crisis – we welcome the uprating of other benefits in April, but LHA is still frozen, rent rises are accelerating and the North has a serious lack of affordable rental properties for those reliant on LHA. Our reliance on the private rented sector to house families on low incomes is a consequence of decades of under-investment by successive governments.

The long-term solution to this crisis is more affordable housing – but in the meantime people are struggling and the pressures on councils are increasing. 

Everyone – particularly those most vulnerable in our society – should be able to live in a decent, affordable home which enables them to thrive. For many, resetting the LHA will ease some of the pressures being felt during the ongoing cost of living crisis.

The chancellor must use the Budget to complete his unfinished business and uprate LHA to provide a lifeline for struggling renters in the North and across the country.

Tracy Harrison, chief executive, NHC