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12,000 young tenants face rent shortfall under LHA cap, report finds
Around 12,000 young social tenants in Scotland could struggle to afford their rent once the Local Housing Allowance (LHA) cap hits, a new report from the Scottish Government and the Chartered Institute of Housing (CIH) Scotland has found.
The report said social tenants under the age of 35 could face a rent shortfall of between £5.3m and £8.6m when the LHA cap comes into force in April 2019.
In light of the report’s findings, Scottish housing minister Kevin Stewart has pledged to write to UK work and pensions minister David Gauke ahead of the Autumn Budget.
From April 2019 housing benefit will be capped at LHA rates. Under-35s will be particularly affected, with their LHA capped at the Shared Accommodation Rate.
Edinburgh and Glasgow are likely to be most severely affected by the policy, with 27% of all Scotland’s single housing benefit claimants aged under 35 living in these two cities – equivalent to more than 6,500 people.
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The total weekly shortfall is expected to be £19,600 in Edinburgh and £18,800 in Glasgow.
Across Scotland, single tenants under the age of 35 living in a one-bedroom home and affected by the cap will face an average shortfall in rent of £6.60 per week. The highest shortfall for one-bedroom homes will be experienced in Edinburgh at £22.09 per week.
There are eight areas showing no shortfalls between average local one-bedroom social rents and the capped LHA rate.
While the government has made various amendments to its plan to apply the LHA cap to supported housing, there has been little focus on how under-35s will be affected.
Mr Stewart said: “We share the concerns that so many have around the potential impact of these cuts. I will be writing to David Gauke MP to make sure that he takes account of this report and calling on him to use the Budget to announce he should not apply the shared accommodation rate in the social sector.”
Ashley Campbell, policy and practice manager at CIH Scotland, said: “The results of this research confirm the damaging impact the UK government’s plans to cap housing benefit at LHA rates will have on younger social tenants in Scotland.
“That impact goes far beyond the immediate financial effect. Many of those 12,000 affected face the prospect of falling into rent arrears and, in the worst cases, losing their home and being made homeless.
“In many cases, local authorities will face real challenges with rehousing those now unable to afford their rent because we simply do not have enough appropriate housing available to do so.”
When Inside Housing asked the Department for Work and Pensions to respond to the report’s findings, a spokesperson sent a statement referencing the LHA cap for supported housing, rather than under-35s general needs housing.
The spokesperson said: “The best way to help people pay their rent is to help them into work, and employment is now at a record high. Our welfare reforms are incentivising work and restoring fairness to the system, and we continue to spend £24bn a year helping people across the UK with their housing costs.
“We will set out the next steps later in the autumn on our new funding model to secure the future of supported accommodation and ensure help goes to those that need it the most.”
