Housing support for private renters isn’t working
People who are eligible for universal credit and live in rented accommodation can apply for help with housing costs*. The benefit is necessary because without it many families and individuals couldn’t pay market rents.
Unfortunately however at present levels of support many still can’t afford market rents now at record levels. Their finances are likely to deteriorate putting them at risk of losing their homes.
How did it come to this?
The mechanism for assessing and delivering housing support is the Local Housing Allowance (LHA). The government introduced it in 2008 to help tenants in the private sector where rent controls no longer applied. Claimants received an amount based on housing need and 50% of average rents in the local ‘Broad Rental Market Area’.
Calculation of LHA has changed quite frequently. In 2011 the allowable share of average local rent was cut to 30%. In 2016 the rate was frozen for 4 years with some exceptions in high-rent areas. The government raised it to 30% in the pandemic but re-froze at 2020/21 levels despite rents rising and the cost of living crisis.
Growing gap
Consequently, the gap between the LHA and the price of rent is continuously growing.
At CAEE we have been investigating the effects of the frozen LHA here in Epsom & Ewell. Currently LHA per week is:
- 1 bedroom: £201.37
- 2 bedroom: £253.15
- 3 bedroom: £316.44
- 4 bedroom: £399.29
- Shared accommodation: £103.56.
From recent searches on private rental property websites, such as Zoopla, Right Move and Spare Room, we find the percentage of properties within the LHA are:
- 5.9% of 1 bedroom properties
- 10.5% of 2 bedroom properties
- 14.29% of 3 bedroom properties
- 0% of 4 bedroom properties
- 0% of shared accommodation.
Why is this a problem?
The level of support offered by the LHA is out of touch with the housing market. As a result, people cannot find affordable housing, and cannot afford to pay their rent. This has knock-on effects. For example;
- A higher percentage of someone’s income is spent on rent, and therefore taken away from other essentials, such as energy or food
- Rent arrears are increasing and debts for individuals rising
- Individuals being declared homeless are offered temporary accommodation but outside Epsom and Ewell and away from their support networks.
What are we doing?
We are asking the government to properly recognise the debt crisis facing low-income households living in privately rented homes. Ahead of the March Budget we highlighted the effects of the LHA freeze on Citizens Advice clients across Surrey.
We also use our own data along with research by respected economics, housing and anti-poverty organisations. In June the Institute of Fiscal Studies reported that housing benefit would cover only 1 in 20 listed privately rented properties; they say: “If these benefit freezes are maintained, private rents will become increasingly unaffordable for those on low incomes”.
What can you do?
Have you (or a family member or someone you know) struggled to find affordable housing in Surrey? Perhaps you are in that situation now? Hearing your experience would help us make the case for change. Please use this form to get in touch. CM/AT
* The claimant/tenant usually receives the housing cost element as part of single Universal Credit straight to their bank account. It is their responsibility to pay the correct amount to the landlord. Some who were claiming help with housing costs before universal credit may still be receiving housing benefit as they have not moved to Universal credit yet. Also there can be new claims to a local authority for housing benefit in some circumstances such as being placed in temporary or supported accommodation.