Source · Select Committees · Work and Pensions Committee
Recommendation 8
8
Acknowledged
The reset of Local Housing Allowance to cover the 30th percentile of rents was a...
Recommendation
The reset of Local Housing Allowance to cover the 30th percentile of rents was a welcome intervention at the start of the COVID-19 pandemic, but the increase has since been eroded by rising housing costs. Some parts of the country are experiencing acute shortages of affordable housing, and we have heard this is leaving some unable to move on from temporary accommodation. DWP should work with other Departments to make housing more affordable for those on low incomes, as it did in 2020. This must include an increase to Local Housing Allowance to ensure that it supports people on low incomes to access secure, affordable housing in their local area. (Paragraph 31) Benefit cap
Government Response Summary
The government describes measures to improve access to home ownership and states that LHA rates are not intended to cover all rents in all areas and are forecast to continue at their current level through to 2025-26, but this will be reviewed annually.
Government Response
Acknowledged
HM Government
Acknowledged
On 9 June 2022, the Prime Minister announced a package of measures to turn Benefits to Bricks and improve access to home ownership, including for households in receipt of benefits. This is a cross-Government effort, with measures to be delivered by DWP including Local Housing Allowance for new homeowners, changes to capital rules so that saving for a deposit is no longer penalised, reducing the qualifying period for Support for Mortgage Interest, and a Housing Support Initiative to bring forward a new supply of affordable homes. On the Local Housing Allowance, rates are not intended to cover all rents in all areas. Investment was significantly increased in April 2020 and rates have been maintained at those levels in cash terms; we are forecast to spend over £28.5 billion to support renters with their housing costs this year. The assumption in the Spending Review 2020 expenditure forecast is that Local Housing Allowance rates will continue at their current level through to 2025–26 but this will be reviewed annually by the Secretary of State alongside wider benefit uprating decisions.