Landlord groups and housing charities have united to denounce the recent local housing allowance (LHA) freeze.

The benefit was frozen despite widespread rising rents, which will leave tenants in some parts of the country facing a shortfall of more than £100 a month, says Shelter.

polly shelter

Chief executive Polly Neate believes housing benefit should be there as a safety net to protect people who’ve hit rock bottom, and if it’s not fit for purpose, homelessness will rise. 

She adds: “The government can step in and keep more people safe in their homes, by reversing the freeze on housing benefit. Without this, a rising tide of homelessness could be the legacy of the pandemic.”

- Advertisement -

The National Residential Landlords Association says the pandemic has highlighted the need for a welfare system that provides tenants and landlords with confidence that benefit payments will cover rents.

A spokesman tells LandlordZONE: “For this reason, we strongly oppose the Chancellor’s decision to freeze the Local Housing Allowance in cash terms.

“It will serve only to make it more difficult to sustain tenancies. The Chancellor should think again and, at the very least, restore the allowance to the 30th percentile and preferable ensure it covers average rents in any given area.”  

However, rental agency Pick My Pad reckons that despite the freeze, many tenants on benefits are in a position to cover their rental costs. 

CEO Mish Liyanage says that in Manchester, the LHA rate is £138.08 per week for a one-bed property while the average private rent is £120 a week. He adds: “An agent can secure a higher rate per week eligible for the DSS tenant, vet the tenants, and get a non-cash damage bond on your behalf.”

Read more about Shelter.

5 COMMENTS

  1. The LHA for Manchester at £138.08 is for Greater Central Manchester. I’ve looked up where this might be and it’s all Mcr postcodes and some M23.

    “CEO Mish Liyanage says that in Manchester, the LHA rate is £138.08 per week for a one-bed property while the average private rent is £120 a week. He adds: “An agent can secure a higher rate per week eligible for the DSS tenant, vet the tenants, and get a non-cash damage bond on your behalf.”

    Mish! You need your bumps feeling if you think a DSS tenant is better at 120 than an employed tenant at 138.08 or above. Give me your mob no and I’ve got LOADS of DSS tenants I can pass on to you. Oh! hang on! You said ‘an agent’ – for a little minute there I thought YOU might be a landlord. An agent securing a rent is FAR from the landlord actually receiving the rent.

    And, hey! Mish, just let me know how a landlord will recover damage caused by … e.g … smoking, pets etc, from a DSS tenant.

  2. The problem with LHA is the difference in the two types of groups using it: 1) Those not in work how need it to pay the whole amount and who claim it for years on end and 2) Those, as happened this year, who find themselves suddenly unable to pay their rent and who need temporary support.

    Those in 1) live in accommodation where the rent is often set at LHA levels and those in 2) find it is not nearly enough to cover their PRS rent.

    Increasing LHA has the knock on effect of raising ALL rents and so LHA needs to go up, rents go up ad infinitum. I’m not sure what the answer is but forever increasing LHA fuels rising rents and costs the tax payer an enormous amount. We may need to rethink the whole process.

    • I’ve put my rents up to cover the extra costs of running a rental property (loss of 10%W&T, increased tax etc). I feel I’ve been forced to do this by the government and I know I’m not the only landlord in this position. Rents where I live are going up and up and it has little if anything to do with LHA rates.

      My rents are now out of the reach of most people who rely 100% on benefits to pay their rent. There was no shortage of people interested in my last property that came available.

      Many of the landlords I know are selling up as properties become empty, and some are selling having had the tenants move on due an impending sale. This means there are fewer properties available which also puts rents up.

      I think LHA rates need to go up to meet rising rents. And rents are rising due in a big part, to the government’s putting landlords under financial pressure, and due to the impending threat of PRS properties having to have an EPC of C or above – that’s going to be very costly for landlords especially if the maximum amount of £10,000 per property that the landlord is expected to pay out is applied.

      • For most LL unless starting out with a 35 year investment timeline most LL would be better off selling their dud properties not able to achieve EPC C status.

        If in the latter part of a 35 year investment timeline it just wouldn’t be worth LL spending £10000.

        Far better to sell these dud properties to FTB who WON’T be required to comply with EPC regulations.

        I wonder how many existing tenants could afford to buy these dud properties!?

        I suggest none.
        That is why they are tenants!

        So LL selling up gonna leave tens of thousands of homeless tenants.

        What could be more green than sleeping under the stars on a park bench.
        This awaits many current tenants!

  3. There they go again, this constant threat by the loathsome @ssmunching conks of shelter: ‘rising tide of homelessness’ could be the legacy of the pandemic!

    Homelessness, homelessness and homelessness, this, is alway their bleated mantra, all through the lock downs, and it had an effect, as we had tenants contact us worried because of such statements, we had to assure them, all because it’s better to create fear and blame!

    Will it happen, who knows, probably not, does anyone actually believe what those braindeads say, it’s obvious they’re willing it on!

    Yet, so much red tape around these days, unprecedented, extraordinary times and they’re still not happy, sorry, but such a vile bunch of t0ssers.

LEAVE A REPLY

Please enter your comment!
Please enter your name here