The National Residential Landlords Association (NRLA) has criticised the Chancellor Rishi Sunak for cutting the amount those on Universal Credit will be able to claim to pay their rent, pushing millions of landlords and tenants into financial difficulties.

According to a report by the Office for Budget Responsibility (OBR) published at the same time as Rishi Sunak’s Spending Review presented today in parliament, the Local Housing Allowance will be ‘frozen in cash terms from next year onwards’.

This means that the rate will fall below the current level which is set to cover the lowest 30 per cent of rents in any given area.

The NRLA says the announcement is a ‘kick in the teeth’ for both renters and landlords struggling with the consequence of rent arrears through no fault of their own.

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The current rate was set in April to help renters whose incomes had been affected by the pandemic to meet the cost of their rents.

A recent analysis by the Joseph Rowntree Foundation suggests that five per cent (200,000) households in the private rented sector are in arrears.

Also, 30 per cent of all private rented households are worried about paying their rent in the next three months, compared to 19 per cent immediately pre-COVID-19.

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Ben Beadle (pictured), Chief Executive of the National Residential Landlords Association, says: “Many renters and landlords are struggling with the consequence of rent arrears through no fault of their own yet the Government is failing to take the action needed to address this.

“Whilst the Chancellor has spoken about the need to support those who find themselves homeless, it would be much better for all concerned to provide the funds needed to sustain tenancies in the first place.”

2 COMMENTS

  1. The problem with LHA going up is that it pushes all the rents up and it becomes a vicious cycle. There was a big rise in LHA rates this year after years of small or no rises and look what happened t rents – they shot up. The Housing bill in thiss country is crippling and we are all paying it. We need more social housing asap!

  2. LHA frozen? That’s not news. In my area, in 2008 the LHA for a 3 bed was £135.00, it then fell by around £8 when tenants were expected to find the extra rent from other benefits. Whether this was because it was considered that benefits in other areas were too high or the council wanted to try and lower the asking rents, I don’t know. In Oct 2020 it was £136.93 – almost back to where it was 12 years ago. This is still enough to more than cover a 3 bed house in my area.

    “Also, 30 per cent of all private rented households are worried about paying their rent in the next three months, compared to 19 per cent immediately pre-COVID-19.”

    This is meaningless unless we know the stats for social/housing association/council renting and people with mortgages. It also shows that 70% of PR tenants are NOT worried. Without knowing more about the 30% – are these people who have lost their jobs? Self employed? paying for a big family holiday? suffering from fiscal diarrhea / incompetence ? etc? – nobody can draw any conclusions . Is this yet another London-centric news article?

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