The freeze on Local Housing Allowance rates must be scrapped to open up the private rented sector to the homeless, according to crossbench peer, Lord Best.
This year is the second year of the Government’s freeze on Local Housing Allowance rates – the allowance paid to benefit claimants who are renting homes from private landlords.
In the Summer Budget 2015 the Chancellor announced that LHA rates – set at the 30th percentile point for local market rents – would be frozen at the 2016/17 level for four years even if market rose over that period.
This freeze also applies where housing costs are paid through Universal Credit.
This has led to fears that fewer landlords will be willing to accommodate tenants on benefits – particularly against a backdrop of rising rents and increasing regulatory costs.
The Homelessness Reduction Bill secured its second reading on Friday in the House of Lords and on opening the debate Lord Best said there is a direct link between the LHA freeze and the increasing number of people declared homelessness.
He said: “Cuts to housing support accelerate and exaggerate current homelessness problems because they block off opportunities for accommodation in the private rented sector.”
He added: “If the least affluent are to be housed in the private rented sector—as they must be, because there is a woeful lack of available council and housing association accommodation—then the DWP must return to paying the same rent as the landlord can get from other tenants. The freeze on local housing allowances must go.”
LHA rates are updated and come into effect from April each year. The government has indicated that this year some money saved through the freeze will be used help landlords in areas hit by the biggest market rent rises.
To read the full transcript of the Homelessness Reduction Bill debate click here.
The date for Committee Stage of the Bill to begin has yet to be announced.