industry news
Tenants on benefits restricted to the very cheapest private rentals
Housing benefit levels are failing to keep pace with rents across the country and private sector tenants are struggling to find accommodation they can afford to live in. New research from the Chartered Institute of Housing (CIH) has
found a growing gap between Local Housing Allowance (LHA) rates, which determines the level of housing benefit payments, and actual rents charged in the private sector. This is reducing the number of properties available to people
claiming benefits, or forcing tenants to top up their housing benefit from other assistance they may be receiving – but which is intended to cover other living costs, such as utility bills or groceries. Researchers found that tenants under 35 were being particularly badly hit. Analysis conducted by the CIH - focusing on LHA rates since 2012 -
found that in some areas of the UK, people are only able to afford to rent in the bottom five or 10 per cent of the private rented sector. However, the LHA rates were originally intended to ensure that
people could access the ‘cheapest’ 30 per cent of the private market. The situation is set to worsen as LHA rates freeze for four years from April 2016 and housing experts fear this could push more people into homelessness.
Difficulties
CIH chief executive Terrie Alafat said "We are becoming more and more concerned by the lack of correlation between LHA rates and rents, and our research shows that people are going to find it difficult to continue renting in the private sector." She added: "The institute is calling on the Government to review
LHA rates for all categories of accommodation, to make sure everyone is able to access a safe, affordable home." The release of this research coincides with the passing of the
Housing & Planning Act, which will force councils to dispose of more of their properties (to fund right to buy discounts for housing association tenants) while the numbers of homes owned by councils has already fallen to about 1.6 million and demand for social housing has grown. The cash shortfall between LHA and actual rents affects tenants
across the whole of the UK, the study found. In Aberdeen, Scotland, there are very severe cash shortfalls in every LHA category, and in Northern Ireland, 80 per cent of LHA rates have already fallen bellow the bottom 30 per cent of the market - second only to England. In Newport, South Wales, the LHA shared accommodation rate
would need to be set at £29 per week more for people under 35 to be able to afford the whole of the lowest 30 per cent of the market. In England, the LHA rate for Chesterfield's broad rental market area
is even lower than the lowest rent that the rent officer could find in their market evidence data - in other words, there's no shared accommodation available at the LHA rate.
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www.housingmmonline.co.uk | HMM May 2016 | 17
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