We are asking MPs to take action in the Autumn Budget and call on the Chancellor to end the freeze to Local Housing Allowance (LHA) – the support low-income families receive for private rented homes.
Around 1.2m households in the private rented sector receive LHA (a rate of housing benefit for private renters) and about one-third of these households are in low-paid jobs and require LHA to top up their rent.
Since 2011, government reforms have slowly lowered the value of tenants’ entitlements. Most recently, since 2016, rates have been frozen for four years. Consequently, LHA rates have failed to keep pace with even the cheapest local rents.
Our analysis suggests that a million households in Britain (1,069,517) could be put at risk of homelessness by 2020, unless the freeze on LHA rates is lifted. This is because over a million households, who claim housing benefit, live in an area where there will be a shortfall between the amount of LHA they can claim, and the cost of renting one of the cheapest homes by 2020. Once their tenancy ends, they may struggle to find a new one, and be put at risk of homelessness.
Families try their best to manage, but with few options available to them, they are at increasing risk of rent arrears and eviction. Since the LHA cuts began in 2011, the number of homeless households in temporary accommodation has increased from fewer than 49,000 to around 77,000 today. The end of a private tenancy has been an increasing cause of homelessness acceptances, rising from 11% to nearly one third of all cases between 2009 and 2017.
End the LHA freeze
We’re calling for the government to end the LHA freeze two years early and rebase rates to the 30th percentile of local rents.
In the longer term, LHA rates should continue to track the bottom 30th percentile of the market. The decision to decouple rates from actual rent inflation in 2013 and link LHA rates to CPI increased the risk that affordability would decline over the long term, as historically rents have increased faster than headline inflation. This is vital in ensuring that LHA tenants can access a portion of the local rented market.
MPs can take action
We’re asking MPs to write to the Chancellor to ask him to commit to ending the LHA freeze in this Autumn Budget. We also ask MPs to share statistics, information and stories from their own areas about the impact the freeze has had on their constituents.
As the issue of the LHA freeze hasn’t yet been discussed this parliament, we invite MPs to submit parliamentary questions and apply for Westminster Hall and Adjournment debates.
Momentum around ending the freeze is building. Charities, landlord groups, councils, Lords, MPs and former ministers agree families are being put at needless risk of homelessness. Now is the time to use the Autumn Budget to ignite debate around reviewing the LHA freeze and ending a welfare policy which is exacerbating homelessness across the country.
We can help MPs take action on everything we’ve suggested. If you’re an MP and would like more information, please email us on public_affairs@shelter.org.uk.
