Briefing: Local Housing Allowance in Nottingham

By: Ami McCarthy  Published: June 2019


Summary

Increasing numbers of people are coming to Shelter for help after experiencing multiple problems with the new benefit system. They are being forced to make up shortfalls, where their housing benefit (or Local Housing Allowance) does not cover their private rents.

This problem is far from unique to Nottingham, Shelter research shows that in 97% of areas in England, people will experience a shortfall between their rent and Local Housing Allowance for a 2-bedroom home rented at the 30th percentile.

Local Housing Allowance is no longer fit for purpose, the rates must be raised to reflect the true cost of renting.

Key Recommendations:
- The Local Housing Allowance (LHA) rate freeze must come to an end and rates must be restored to reflect at least the bottom 30th percentile (i.e. the cheapest third) of local rents. Those receiving the housing element under UC, for their private rent, would benefit from this
- There needs to be a robust mechanism going forwards that keeps LHA rates covering at least the 30th percentile of local rents in the future, regardless of fluctuations in private rents
- If the freeze does not end early, Targeted Affordability Funding must be increased and be better targeted to the areas where it is needed.

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