Local Housing Allowance rate freeze to be lifted
Blog posted by: Louise Weaver, Monday, 13 January 2020.
In a statement to the House of Commons on 13 January, Will Quince MP announced that the Government will end the four-year freeze to Local Housing Allowance rates from 1 April 2020.
When it was introduced in 2008, Local Housing Allowance (LHA) covered 50% of local rents. In 2011, this was reduced to 30% and in 2012, the link between the rates and local rents was broken. This led to shortfalls between the level of LHA and the true cost of renting in many parts of the country. LHA rates were then completely frozen for four years from April 2016.
Our members have persistently raised this as a core challenge both as a contributor of homelessness and a barrier to people moving on from hostels. Last year in our Annual Review, 71% services said LHA rates were a barrier to move on.
Responding to the announcement that the rate freeze will end in April 2020, Rick Henderson, Chief Executive of Homeless Link, yesterday commented:
“It is clear that the freezing and capping of Local Housing Allowance rates has led to a rise in homelessness, so we are extremely pleased to hear that the lifting of the freeze is soon to be written into law, a move that we have long campaigned for. However, this change alone will not be enough. To ensure that everyone has a home that they can afford, the Government must do more to bring the LHA rate back in line with local rents. Today’s announcement will raise LHA rates in line with the Consumer Price Index (CPI) inflation rate, which is around 1.5%, but this still leaves a significant shortfall in many areas of the country.
“Homeless Link will continue to work with government and our members to make sure that LHA covers the true cost of renting and does not contribute to homelessness in England.”
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