RLA backs campaign to bring LHA rates back in line with rents

A new campaign asking the government to commit to restoring Local Housing Allowance rates to support benefits tenants struggling to pay their rent is being backed by the RLA.

Homeless charity Crisis has launched the ‘Cover the Cost’ campaign, asking the government to commit to restoring LHA rates in the next spending review, so that they cover the cost of renting at least 30% of properties in any given area – and keep up with rises in rents each year.

Local Housing Allowance (LHA), which is administered under Universal Credit, is supposed to provide financial support to those on low incomes who are unable to meet housing costs.

Those who are single and under 35 receive a lower rate of LHA – the Shared Accommodation Rate – which is supposed to cover rent for rooms in shared houses.

However, since 2011 there have been cuts to LHA – meaning it has stopped keeping up with rising rents – and in 2016 it was frozen altogether.

The charity says that as a result of this, fewer homes have been affordable to those receiving benefits.

A lack of social housing means the government is relying on private landlords to house those who cannot access council, or housing association properties, however landlords need to have the confidence that these tenants will be in a position to pay their rent.

Almost two-thirds of private landlords with tenants receiving Universal Credit have experienced them going into rent arrears according to RLA research.

Based on responses from more than 2,200 landlords, the RLA’s research exchange, PEARLfound that 61 per cent of landlords with tenants on Universal Credit have seen them go into rent arrears.

This is up from 27 per cent in 2016.

Previously, LHA rates were set to ensure that recipients could afford at least 30% of properties in their area, giving households more opportunity to find safe and stable homes.

Research by Crisis and the Chartered Institute of Housing (CIH) has shown reductions to LHA rates mean that in 92 per cent of areas in Great Britain, one fifth or less of the private rented sector is affordable to either single people, couples or small families.

The CIH last year backed the RLA call for the freeze to be lifted.

Matt Green, Director of Crisis Skylight, said change is needed to give landlords confidence that people claiming Universal Credit will be able to pay their rent.

He said: “Universal Credit can be a tool to prevent homelessness, but only with the right investment – and that’s why we are launching this campaign today.

“We need to see Government bring Universal Credit back in step with the true cost of renting. “This will drastically reduce council spending and will provide greater reassurance to private landlords that people on Universal Credit can afford to pay their rent each month.”

Written by Sally Walmsley

Blog Post from Residential Landlords Association

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