Landlords back MPs' call to uplift housing benefits

21 Mar 2024 12:34 PM

In the wake of a new report by the Work & Pensions Select Committee, the NRLA welcomes the news that the Committee recommends an uplift in housing benefit levels. 

Responding to the Committee's proposals, Ben Beadle, Chief Executive of the National Residential Landlords Association (NRLA) said:

“We welcome the Committee’s call for housing benefit rates to be reviewed annually in line with housing costs. This has been a longstanding call by the NRLA and others. 

“Too often the housing benefit system has left tenants and responsible landlords not knowing if rents can be covered from one year to the next. What should be a safety net has become a source of frustration and anxiety. 

“All parties need to provide certainty for those reliant on benefits that they can keep a roof over their heads by ensuring rates permanently remain linked to market rents.”

In its report out today on benefit levels, the Work and Pensions Select Committee has argued that: “The Government should make a commitment to uprate annually Local Housing Allowance (LHA) so that it retains its value at the 30th percentile of rents in a Broad Rental Market Area (BRMA).”

LHA rates have been frozen since April 2020. The Institute for Fiscal Studies has noted that since then, the proportion of new private rental properties listed on Zoopla affordable for those in receipt of the LHA has fallen from 23 per cent to just 5 per cent.

From April this year the LHA rate will once again cover the bottom 30 per cent of rents in any given area. However, the Institute for Public Policy Research has warned that even when the rate is unfrozen, over 800,000 households on universal credit will continue to face shortfalls between their housing support payment and the rents they pay. 

At present, housing benefit rates are set to be frozen again from next year. 

If you'd like to read the Committee's report in full, click here to access the relevant documents.

Notes

• The Work and Pensions Select Committee notes that: “The evidence is clear that support for housing costs cannot be viewed in isolation from wider support provided through other benefits. When and if claimants experience a shortfall in rent, this can impact other parts of household budgeting and erode income otherwise intended for daily living costs. The Government should make  a commitment to uprate annually Local Housing Allowance so that it retains its value  at the 30th percentile of rents in a Broad Rental Market Area (BRMA).” 
• The NRLA’s written evidence to the inquiry can be accessed here. The transcript of the oral evidence provided by its Chief Executive, Ben Beadle, is available here.
• In June last year the Institute for Fiscal Studies noted: “Local housing allowance (LHA) rates – which govern the maximum amount of support for their rent that low-income private renters can get – have been frozen in cash terms since April 2020. But rents for new lets have increased by more than a fifth on average. The result is that the proportion of new private rental properties on Zoopla affordable to housing benefit or universal credit recipients – i.e. with rents that can be covered by the LHA – has plummeted from 23% to 5% since the freeze, a tiny proportion compared with the 38% of private renters who receive housing benefit.” Further details can be accessed here.
• In a report earlier this year, the Institute for Public Policy Research noted: “We estimate that even when LHA is unfrozen, over 800,000 households on UC will continue to face shortfalls16 – while 30 per cent of private rented sector homes in an area may be affordable under LHA rates, those properties may not be available.” Details can be accessed here.
• The Budget has announced that from 6th April 2024, the higher rate of Capital Gains Tax for residential property disposals will be cut from 28% to 24%. This will have only a limited impact given the CGT allowance for the 2023/24 tax year fell by more than 50% from its 2022/23 threshold of £12,300 to £6,000. It will fall to £3,000 as of 6th April this year. Further information can be found here.
• Further information about the NRLA can be found at www.nrla.org.uk. It posts on X @NRLAssociation.
• The NRLA’s press office can be contacted by emailing press@nrla.org.uk or by calling 0300 131 6363.