The housing benefit freeze has put private renting out of reach for most low-income tenants and puts thousands at risk of poverty and homelessness, says the Chartered Institute of Housing (CIH)
New research from the CIH has found that more than 90% of Local Housing Allowance (LHA) rates across the UK now fail to cover the cheapest rents, as they were originally designed to do.
LHA rates were frozen for four years in 2016 and the CIH has warned that they have fallen so far behind even the cheapest rents that private renting has become unaffordable for most low-income tenants – putting them at risk of homelessness as they are forced to choose between basic living expenses and paying the shortfall.
CIH is urging the UK Government to review the policy and to end the freeze immediately.
LHA rates are meant to cover the cheapest 30% of homes in any given area. But they haven’t been increased in line with local rents since April 2013 and they remain frozen until April 2020. As a result, renters across some Broad Rental Market Areas, including Glasgow and Edinburgh are facing gaps of over £10 a week on a single room in a shared home, while tenants with properties of between one to four bedrooms have even larger gaps between LHA rate and rent.
Over 12 months some of the larger properties in Glasgow and East Dunbartonshire will have a gap of over £1,000 – making it increasingly likely that renters will be forced to choose between paying for basic necessities like food and heating or their rent.
The UK Government introduced targeted affordability funding in 2014 to bridge the biggest gaps but CIH’s new report has found that its impact has been insignificant, covering only a handful of the shortfalls completely.
CIH Scotland Director Annie Mauger said: “Our research makes it clear just how far housing benefit for private renters has failed to keep pace with even the cheapest private rents. We fear this policy is putting thousands of private renters on low incomes at risk of poverty and homelessness.
“We are calling on the UK Government to conduct an immediate review and to look at ending the freeze on Local Housing Allowance.”
CIH said the policy is seriously affecting single people under the age of 25, because they are only entitled to LHA to cover the rent on a bedroom in a shared home. Even small gaps between their LHA and their rent can be serious because the levels of other benefits they may be entitled to (for example Jobseeker’s Allowance) are also much lower.
CIH policy and practice officer Sam Lister, who wrote the report, said general benefit rates for single people aged under 25 are too low to contribute towards any gap without putting them at significant risk of homelessness.
Matt Downie, director of policy and external affairs at the homelessness charity Crisis, said: “This report highlights just how much housing benefits for private renters are falling short of the levels needed, leaving many homeless people stuck in a desperate situation and putting yet more people at risk of homelessness.
“There are 236,000 people across Britain experiencing the worst forms of homelessness – this includes those sleeping on the streets, living in unsuitable hostels, and sofa-surfing. In many of these cases, people simply can’t find a home because there isn’t enough social housing and housing benefits are too low to cover private rents.
“Homelessness is not inevitable – there is clear evidence that it can be ended with the right policies in place. The Government must urgently reform housing benefits for private renters, so they not only match the true cost of renting but also keep pace with future rent changes.”
