Briefing: Local Housing Allowance freeze
By: Jenny Pennington. Heather Spurr Published: March 2017
Local Housing Allowance has been frozen for four years from April 2016. This piece of analysis identifies the shortfalls in housing benefit experienced by households living in the private rented sector in England.
- Local Housing Allowance analysis (PDF 250.2 KB)
Hundreds of thousands of private renters in England have to claim housing benefit in order to help cover the cost of their rent. Many of these renters will be working, but their income won’t be sufficient to afford private rents in their local area. Private rents have been rising consistently for several years, between 2011/12 and 2015 they rose in 79% of the country.
Local Housing Allowance (LHA) is the name given to housing benefit for private renters. LHA rates are calculated for every local area based on local rents. The maximum amount of support a household can claim will depend on where they live, the minimum number of bedrooms they need and their income.
Anyone who claims housing benefit is also expected to find a home to rent which is cheaper than average for their local area. Housing benefit levels are already set at, or below, the cost of renting a home in the bottom third of the private rental market. Since 2010 housing benefit levels have not risen in line with rising private rents, and current freeze means that they will remain frozen at their 2016 levels until 2020, regardless of how much private rents have gone up by in each local area.
This means that most private renters who need their income topped up by housing benefit will face a monthly shortfall between the actual cost of their rent, and the support available. Our analysis reveals just how dramatic those shortfalls can be for three different household types: families with 1 or 2 children, couples and single people.
We have also identified ‘blackspots across the country where these different household types will be most affected. Interestingly, these ‘blackspots’ aren’t just limited to London or well-known expensive postcodes they also include places like Milton Keynes, Luton, Warrington and Bristol.