Housing body calls for benefit boost in Spring Budget
A leading housing body has called on the government to increase support for tenants in the private rented sector in the forthcoming Spring Budget.
The Chartered Institute of Housing (CIH), which is the professional body for people who work in housing, said it wanted the government to use the Budget ‘to rectify a huge gap in support for tenants in the private sector, created by decisions in the Autumn Spending Review’.
CIH said that the government’s decision not to raise Local Housing Allowance (LHA) – the housing benefit paid to tenants in the private rented sector – meant it did not reflect the true cost of renting.
LHA rates are set by law and based on private market rents paid by tenants in a geographically-based broad rental market area (BRMA). They were restored to the 30th percentile rent – meaning they covered roughly the cheapest third of private rents in each area – in April 2020 in response to the pandemic, but have since been frozen in cash terms, meaning a cut in real terms as rent as risen
CIH analysis of the Valuation Office Agency list of rents shows that in April 2022, the latest data available, the LHA rate for tenants who live in shared accommodation covered a maximum of ten percent of local rents in seven out of every ten BRMAs.
For every category of housing – which is based on the number of bedrooms in the property – at least one in five BRMAs had fewer than 20 percent of homes available within the LHA rate. CIH said that the rapid erosion in the shared accommodation rate was particularly alarming, with nearly nine in every ten BRMAs having fewer than 20 per cent of homes available, and in one in every ten there are no shared properties at all within the LHA rate.
CIH said 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.
CIH is calling on the government to restore LHA rates to the full 30th percentile rent and ensure this is maintained in future years.
Photo by micheile henderson