Many tenants unable to afford rent despite allowance reform
Plans to end the freeze on housing benefits will still leave many tenants unable to afford rent say landlords.
Following the announcement that from April the Local Housing Allowance will increase by inflation as measured by the Consumer Price Index, the Residential Landlords Association says that as the allowance has been frozen since 2016, a rise of around 1.5 per cent – the inflation level – is actually leaving tenants considerably out of pocket.
The LHA was introduced in 2008 and is used to calculate housing benefit for those in private rented accommodation.
Prior to 2016 the LHA was based on enabling a tenant to afford a rent in their area.
Given how rents have moved in different areas with some having steeper increases than others, instead of a flat rate increase, the RLA is calling for the LHA to again be based on this area approach.
John Stewart, policy manager for the RLA, says: “The benefit level needs to reflect the realities of the level of rents locally. Given rents have risen by an average of five per cent, and in some areas more than that over the last four years, a rise of 1.5 per cent in the benefit level is not going to be much help to a tenant struggling to afford the rent in those areas and many others.
“If it really wants to help tenants, the government should restore the direct link between rent levels and the LHA instead of a paltry flat rate increase.”