Plans to end the freeze on housing benefits will still leave many tenants unable to afford their rent say landlords.
It was announced today that from April the Local Housing Allowance (LHA) will increase by inflation (as measured by the Consumer Price Index).
However, the Residential Landlords Association says that as the Allowance has been frozen since 2016, a rise of around 1.5 per cent is leaving tenants considerably out of pocket.
How does the LHA work?
The LHA was introduced in 2008 and is used to calculate housing benefit for those in private rented accommodation.
Prior to 2016 the LHA rate differed, depending on where you lived. It was calculated to allow a tenant to afford to rent 30 per cent of homes in the area.
What the government has today announced is a flat rate increase across the board.
However, as rents have changed by different degrees in different areas – with some having steeper increases than others – the RLA is calling for the LHA to once again be based on this 30th percentile level, to reflect local rents.
John Stewart, RLA policy manager said: “The benefit level needs to reflect the realities of the level of rents locally.
“Given rents have risen by an average of five per cent, and in some areas more than that over the last four years, a rise of 1.5 per cent in the benefit level is not going to be much help to a tenant struggling to afford the rent in those areas and many others.
“If it really wants to help tenants, the government should restore the direct link between rent levels and the LHA instead of a paltry flat rate increase.”