Government Must Tackle Rent Debt Crisis

Propertymark, along with other organisations, has called on the Government to complete and publish a full assessment on how its decision to freeze Local Housing Allowance and cut Universal Credit has impacted renters. During the pandemic, the Government took steps to prevent a housing debt crisis – which included the restoration of LHA rates and increasing the UC Personal Allowance. However, the number of private rented households in receipt of UC increased by almost 107 per cent between February 2020 and February 2021. Additionally, the Government confirmed that where households are struggling to make ends meet they have an average £100 per month gap between the housing support received and the rent they must pay. Read more on the NRLA website.

https://www.nrla.org.uk/news/warning-issued-over-impact-of-benefit-cuts-on-renters 

Universal Credit: Housing – Parliamentary Written Answer

 Lord Bird: To ask Her Majesty's Government what plans they have to ensure that the Universal Credit housing allocation adequately supports recipients to pay their rent.

Baroness Stedman-Scott: In April we increased Local Housing Allowance (LHA) rates so that they cover 30 per cent of local rents in the Private Rented Sector. This significant investment of almost £1 billion will mean over one million households will see an increase, on average, of £600 this year. A decision on LHA rates from April 2021 will be taken prior to the start of the financial year. For those living in the Social Rented Sector, maximum housing costs support is based on actual rent and eligible service charges less any deductions for under-occupation. For those who require additional support Discretionary Housing Payments (DHPs) are available.  http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Lords/2020-10-21/HL9408

Housing Benefit Fails To Cover Rent In Nearly All Of England’s Council Areas

Local Housing Allowance payments are too small to cover average rent almost everywhere in England, analysts for youth homelessness charity Centrepoint have found. In 243 of the 247 local authorities where rent cost data was available, the lowest tier of housing benefit is not enough to pay for a room in a shared house – forcing young people to choose between rent and food. And in more than a third of council areas, the amount of Universal Credit paid to under-25s was at least £100 below the price of rent per month. Read more on the Big Issue website.

https://www.bigissue.com/latest/housing-benefit-fails-to-cover-rent-in-nearly-all-of-englands-council-areas/

Landlords Support Mps Calls To Boost Housing Benefit

Private landlords are supporting calls by MPs on Parliament’s Housing, Communities and Local Government Select Committee to boost the financial support available to tenants during the COVID-19 outbreak. Responding to the Committee’s calls for the Local Housing Allowance to be set at a rate that reflects real market rents, Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “Our research shows that the vast majority of landlords approached for help by tenants struggling as a result of coronavirus are responding positively. We have long called for benefits to cover rents which would be by far best option for tenants and landlords alike.”  Read more on the RLA website.

https://news.rla.org.uk/landlords-support-mps-calls-to-boost-housing-benefit/

LHA To Increase By CPI

Will Quince MP, Minister for Welfare Delivery, has announced that from April 2020, Local Housing Allowance (LHA) rates will be increased in line with the Consumer Price Index (CPI), ending the freeze to the LHA which has been in place since 2016.  The Government says this increase will mean the majority of people in receipt of housing support in the Private Rented Sector will see their housing support increase, on average benefiting by around £10 per month. The latest CPI rate for November 2019 was 1.5 percent.  The Government also confirmed their September 2019 commitment to an additional £40 million in Discretionary Housing Payments (DHPs) for 2020/21. Read more on the NLA website.

https://landlords.org.uk/news-campaigns/news/lha-increase-cpi-april-year

Local Housing Allowance – Parliamentary Written Answer

Stephen Crabb: To ask the Secretary of State for Work and Pensions, if she will make an estimate of the cost to the public purse of restoring Local Housing Allowance rates to the 30th percentile.

Will Quince: We estimate the cost would be about £800 million in 2020/21, excluding any changes in behaviour by tenants and landlords

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2019-10-15/456

Government Has Made No Assessment Of Case For Increasing Housing Benefit

There has been no government assessment of the case for increasing the scope of housing support, despite the sector stressing the need for investment. Crossbench peer Lord Hylton put a written Lords question as to the extent of assessment of the case for increasing both the scope and total amount of housing benefit – including any resulting savings on temporary accommodation and other costs. For the DWP, Tory peer Baroness Stedman-Scott said no assessment has been made of either case with decisions on the uprating of Local Housing Allowance from April 2020 to be “discussed later this year.” Read more on 24housing.

https://www.24housing.co.uk/news/government-has-made-no-assessment-of-case-for-increasing-housing-benefit/

Spending Round: Government Injects £40m Into DHPs But Is Silent On LHA Rates

An extra £40m in housing cost top-ups for private renters has been unveiled as part of the Spending Round, but no announcement has been made on future benefit levels. The Spending Round 2019 document, which sets out the budget settlement for each government department, includes a £106m package for the Department for Work and Pensions in 2020/21. Of this, £40m has been earmarked as additional funding for Discretionary Housing Payments (DHPs) “to tackle affordability pressures in the private rented sector in England and Wales”. The spending documents make no mention of Local Housing Allowance (LHA) – the formula used to calculate housing benefit levels. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/spending-round-government-injects-40m-into-dhps-but-is-silent-on-lha-rates-63047?utm_source=Housing60&utm_medium=email&utm_content=article_link&utm_campaign=H60

Government Hiding Behind ‘Meaningless’ Definitions Of Affordable Housing

Government is hiding behind “frankly meaningless” definitions of affordable housing and inflated housebuilding stats to avoid the hard realities of the housing crisis, the Commons has heard. Members debating the future for the Local Housing Allowance (LHA) heard Labour’s Liam Byrne say of his Birmingham constituency: “I am not prepared to live in a city where we have cranes in the sky, but homeless people dying in the doorways – we need an emergency response to this moral emergency.” During the debate, DWP minister Will Quince surprised some in saying discretionary housing payments were “not necessarily” temporary. Read more on 24housing.

https://www.24housing.co.uk/news/government-hiding-behind-meaningless-definitions-of-affordable-housing/

Rudd Stresses Work With PRS Over Application Of Local Housing Allowance

Amber Rudd has said a reassessment of the Local Housing Allowance (LHA) should be a priority with the benefit freeze thawed. Rudd reinforced her stance on the freeze when appearing before the Commons Work and Pensions Committee. Rudd wants an end to the benefit freeze guaranteed, even in the event of a no-deal Brexit. She told the committee that with the freeze thawed the emphasis should be on a fresh look at the application of LHA – and related work on the scope for support from the private rented sector. Read more on 24housing.

https://www.24housing.co.uk/news/rudd-stresses-work-with-prs-over-future-application-of-lha/

UK Housing Crisis Deepens As Benefit Claimants Priced Out By High Rents

Britain’s housing crisis has hit a new low with not one of the single rooms available for private rent in large parts of London and Greater Manchester within the budget of people on housing benefit. None of 87 rooms for rent in outer south-west London – which includes areas such as Feltham and Hanworth – were affordable for people relying on local housing allowance (LHA) and neither were any of the rooms in the southern Greater Manchester area, including Stockport and Wythenshawe, according to analysis of official 2018 data by London Councils, the local government association for the capital. Read more on the Observer website.

https://www.theguardian.com/society/2019/jul/07/uk-housing-crisis-deepens-as-benefit-claimants-priced-out-by-high-rents

Benefit Cuts 'Have Made Private Renting Unaffordable'

Renting privately across most of England has become unaffordable for people on benefits, housing charities have warned, with people in some areas short of at least £100 a month. Analysis by the BBC has shown the gap between rent and Local Housing Allowance (LHA) more than doubled across most of the country since 2016. Shelter said people were having to "choose between food and rent". The government said it had targeted extra funding at low-income households. Working age benefits were frozen for four years in 2016, while rents have continued to rise. Read more on the BBC website.

https://www.bbc.co.uk/news/uk-england-48038833

Benefit Changes Driving Increase In PRS Homelessness

New research reinforces changes to the benefit system as behind the decade-long increase in homelessness from private rented sector (PRS) housing. It comes a week after a United Nations report damned the government’s “callous” approach to welfare reform. Specifically, the research references the 2008 introduction of the Local Housing Allowance (LHA), as a way of calculating Housing Benefit payments for low income households. The gap between LHA rates and actual rents has increased in recent years and is expected to continue to increase in the future. A quarter of landlords surveyed in this research reported that this gap was more than £100 per month. Read more on 24housing.

https://www.24housing.co.uk/news/research-reinforces-benefit-changes-drive-increase-in-prs-homelessness/

Affordable Housing: Construction – Parliamentary Written Answer

Lord Taylor of Warwick: To ask Her Majesty's Government what assessment they have made of the claim by the Centre of Social Justice in its report, A Social Housing Strategy, published on 27 October, that designated affordable new homes do not reduce the housing benefit bill.

Lord Bourne of Aberystwyth: We have not directly carried out an assessment in response to the claim made by the Centre for Social Justice. However, new affordable housing reduces pressure on the Housing Benefit bill by enabling people to live in sub-market rent homes which, on average, have lower associated housing benefit costs than the Local housing Allowance on an equivalent home in the private rented sector.

https://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Lords/2018-10-29/HL11102

99% Of Councils Feel LHA Cap Restricts Young People’s Access To Housing

Youth homelessness charity Centrepoint said 99% of councils think the level of housing benefit young people are entitled to is not enough to rent in the private sector. People under 35 are usually only entitled to a lower rate of Local Housing Allowance (LHA) known as the Shared Accommodation Rate. And 85% of the 119 English local authorities surveyed said they struggle to deliver their housing duties because of welfare reforms affecting young people. Download the research report The Homelessness Reduction Act: Will it work for young people? From the Centrepoint website.

https://centrepoint.org.uk/media/2511/the-homelessness-reduction-act-will-it-work-for-young-people.pdf

UK Affordable Housing Backed By World’s Largest Property Investor

New-York based private equity fund Blackstone is investing in Sage Housing Association to help the firm buy affordable housing allocations from developers. The funds will be used to allow Sage to buy private developers’ Section 106 allocations, affordable housing that developers can be required to deliver – on a large scale around the country. All properties will be for rent at Local Housing Allowance rates or lower, with Blackstone planning to give local authorities nomination rights. Sage was bought by residential investors Regis Group in 2017 and started buying Section 106 allocations of between five and 10 homes. They have won a third of their bids since then, according to the source. Read more on the buyassociation website.

Landlords ‘Unwilling’ To Rent To Universal Credit Recipients

Universal credit will lead to a “steady decrease” in the number of landlords willing to rent out properties to benefit claimants because it encourages tenants to fall into arrears, the National Landlords Association (NLA) has warned. Only 18-20% of private landlords accept tenants who pay their rent with local housing allowance (LHA), the housing benefit that will eventually be replaced by universal credit – down from 46% in 2010/-11. The latest survey of NLA members showed that 68% of landlords with LHA tenants and 63% with other benefit recipients experienced rent arrears in the last 12 months. LHA tenants owed an average of £2,263, compared with £1,774 by all tenant types. Read more on the Observer website.

Local Housing Allowance – Parliamentary Written Answer

Hywel Williams:To ask the Secretary of State for Work and Pensions, what plans he has to review the local housing allowance rate to ensure it is accurately aligned with the rental market.

Caroline Dinenage: There are no plans to lift the four year freeze to Local Housing Allowance rates before April 2020. The Government recognises however, that the impact of this measure will vary, especially in areas of high rental growth and in view of this has made available 30 per cent of the savings to create Targeted Affordability Funding. This funding is used to increase Local Housing Allowance rates in areas where local rents have diverged the most.

Government Scraps Local Top Up For Supported Housing

Following the announcement that Government is dropping Local Housing Allowance rates from the funding mechanism for supported housing, the Committees have now received the full response from Government to their joint report. The response shows that the Government has also acted on the Committees' concerns that local authorities should not have to "top up" payment for supported housing, by introducing a new "sheltered rent" that means the cost of sheltered and extra care housing will be entirely covered by Housing Benefit or its replacement Universal Credit, in accordance with and actually going further than another of the committees' central recommendations. Read more on the Parliament website.

Majority Of Charity’s Supported Housing Under Threat From LHA Cap

Analysis by Frontier Economics found that if the freeze on Local Housing Allowance (LHA) rates continues into 2020/21 and there is no top-up funding available, 91% of The Salvation Army’s homes would cost more to run than there is funding to cover them. This would mean the charity would be forced to raise income elsewhere. The Salvation Army is calling on the government to delay applying LHA rates to supported housing until April 2022 to allow time for a new solution to be found that “accurately reflects the true costs of safe and secure supported housing”, a spokesperson said. Read more on Inside Housing.