MPs have recommended that housing benefit rates be updated yearly to reflect the lower 30% of rental prices, a suggestion supported by the National Residential Landlords Association.
The Work and Pensions Select Committee released a report today on benefit levels, stating: “The government should commit to annually raising the Local Housing Allowance (LHA) so it maintains alignment with the 30th percentile of rents in a Broad Rental Market Area (BRMA).”
Since April 2020, LHA rates have not been adjusted. The Institute for Fiscal Studies highlighted that the share of new private rental properties within the LHA rate on Zoopla has plummeted from 23% to a mere 5%.
Ben Beadle, the National Residential Landlords Association (NRLA) Chief Executive, expressed his approval of the Committee’s recommendation to regularly review housing benefit rates in accordance with housing costs. “This aligns with the NRLA’s and other organizations’ long-term requests,” he said.
He added, “The housing benefit system often leaves tenants and responsible landlords uncertain whether rents will remain affordable from year to year. Instead of being a safety net, it has become a cause of worry and stress.
“It is essential for all stakeholders to guarantee that those depending on benefits have the assurance that they can afford their housing by consistently keeping rates in sync with the rental market.”
Starting this April, the LHA rate will return to covering the bottom 30% of rents in any area.
Despite this update, the Institute for Public Policy Research has cautioned that more than 800,000 households on universal credit will still experience gaps between their housing support and the actual rent they owe, even after the rate is lifted.
As it stands, there are plans to freeze housing benefit rates once again the following year.
