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Failure to unfreeze housing benefit makes private rents unaffordable, CIH finds
The government’s failure to unfreeze housing benefit is making rent unaffordable for private sector tenants, according to the Chartered Institute of Housing (CIH).
The CIH said this was because the Local Housing Allowance (LHA) is supposed to support private tenants by covering rent for the cheapest 30% of properties in an area, but the current rates fail to do this.
The membership body’s analysis for the 2023 UK Housing Review showed the government’s decision to keep LHA rates frozen at 2020 levels led to a “huge gap” in support for private tenants.
Its data shows that, in April 2022, the LHA shared rate for those who are single and under 35 only covered 10% of rent or less, in seven out of every 10 local markets.
For every category of dwelling, at least one in five local markets had fewer than 20% of homes available within the LHA rate.
The CIH said the rapid erosion in the shared accommodation rate is “particularly alarming”, with nearly nine in every 10 local markets having fewer than 20% of homes available. In one in 10, there are no shared properties at all within the LHA rate.
A report last year by Shelter, the housing charity, found private rents across the country have gone up by between 5% and 8% since the LHA was frozen in 2020 in response to the pandemic.
The CIH said: “The review shows that limitations on levels of eligible rent have become a major structural problem, undermining the logic that rent payments should not result in household incomes falling below an agreed minimum.
“In a large number of cases they now do, affecting the incomes of existing tenants and making the private rented sector even less accessible to benefit recipients.”
Ahead of next week’s Budget, the CIH and other organisations have called on chancellor Jeremy Hunt to reset LHA rates so they cover at least the 30th percentile of local rents, and then relink the benefit to the real cost of renting for future years.
The Northern Housing Consortium (NHC), which represents the biggest landlords in the North of England, focused its entire Budget submission on the issue.
Writing in Inside Housing this week, Tracy Harrison, chief executive of the NHC, said the issue was particularly important for the North, where rents had increased across all regions.
Ms Harrison wrote: “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.”
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