Following the government’s recent Budget announcement, it has been confirmed that the amount of housing benefit which private renters can claim will be frozen for another year. This means that while the low-income households which receive these benefits will continue to get support for the full or partial payment of their rent, these payments will no longer reflect any rent increase, and this could result in claimants experiencing shortfalls. The cap which identifies the maximum amount that these households can claim is set by rent officers in approximately 200 regions in the UK.
Charities including Shelter have been warning the government that an increasing lack of social housing, coupled with rising rents, is putting families at risk of homelessness. The Joseph Rowntree Foundation [JRF], an anti-poverty charity, has explained that this freeze means the cap will move further away from synchronisation with renting costs. Local Housing Allowance [LHA] determines how much can be claimed by those who rent from private landlords and payments are based on the size of the property, up to four bedrooms, and are subject to a nationwide cap which restricts claims in some London areas. Housing benefit forms part of Universal Credit or is provided as an independent payment.
During the Budget, the government confirmed its commitment to a fair and sustainable welfare system with the provision of affordable housing, but it did not mention that the amount of the local housing allowance or benefits cap would remain unchanged. Charities have criticised the four-year freeze of LHA rates, from 2020 to 2024, as this prevented claimants from covering the escalating rental prices, with Citizens Advice forecasting that approximately two-thirds experienced shortfalls as a result.
The government has estimated that the new uprating this year will increase potential benefits by around £785 a year for approximately 1.6 million households. However, campaign groups have expressed frustration that LHA rates will remain frozen next year, with the JRF reportedly estimating that this would leave private renters with housing benefits £243 a year worse off. The government also confirmed the link between LHA rates and local rents would continue to be absent
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