Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 25
25
Acknowledged
Maintain Local Housing Allowance rates at 30th percentile of market rents annually
Recommendation
We recommend that the Government reconsider its position on re-freezing local housing allowance rates from 2025–26 onwards. Instead, the Government must maintain LHA rates at least at the 30th percentile of local market rents each year to ensure that those children and adults receiving benefits have sufficient access to rental properties and to prevent further escalation of pressure on local authorities’ homelessness services. (Paragraph 138) Priorities for the next Government
Government Response Summary
The government acknowledges the importance of stable housing and commits to reviewing Local Housing Allowance rates every year, considering factors like local rents and the broader fiscal context. It highlights the £1.2 billion investment from April 2024 to increase LHA rates to the 30th percentile, but does not commit to maintaining this level annually from 2025-26 onwards.
Government Response
Acknowledged
HM Government
Acknowledged
47. The Government understands the importance of stable housing and is taking action to increase access to affordable housing. Increasing the Local Housing Allowance (LHA), in recognition of increasing rents, is a key part of helping those who get housing support. That is why the Secretary of State for the Department of Work and Pensions has committed to reviewing the LHA rates every year, taking into account a range of factors including evidence on local rents and the broader fiscal context. 48. Our £1.2 billion investment from April 2024 will increase LHA rates to the 30th percentile of local market rents. This will see 1.6 million private renters gain, on average, nearly £800 per year in additional help with their rental costs in 2024-25. 49. This significant investment of £7 billion over five years, taken together with the wider benefits uprating, will improve housing affordability for low-income households, helping them afford their rent and reducing the risk of rent arrears and homelessness. 50. The necessary legislation to set the rates from April 2024 came into force in January. This allows the Department for Work and Pensions and local authorities sufficient time to implement the rates and ensure claimants are paid accurately. This is in line with increases to other benefits which also apply from the start of the financial year. 51. LHA is only one element of the wider support provided to those on low incomes renting in the private and social sectors. In total the Government is forecast to spend over £30 billion in 2023/24 on housing support for renters in the private and social rented sectors. In addition, we continue to provide local authorities with funding for Discretionary Housing Payments so that they can support those who may still need support with their housing costs. Since 2011, the Government has provided nearly £1.7 billion in Discretionary Housing Payments to local authorities. This is in addition to our wider Affordable Housing Programme and our Local Authority Housing Fund. 52. The provision of affordable housing is part of the Government’s plan to build more homes and provide aspiring homeowners with a step onto the housing ladder. Our £11.5 billion Affordable Homes Programme will deliver thousands of affordable homes for both rent and to buy right across the country, after the Levelling Up White Paper committed to increasing the supply of social rented homes. 53. Since 2010, we have delivered over 696,100 new affordable homes, including over 482,000 affordable homes for rent, of which over 172,600 homes for social rent.