Members of parliament want housing benefit rates to be updated annually to match the bottom 30% of rents – a proposal that’s been backed by the National Residential Landlords Association.
In its report out today on benefit levels, the Work and Pensions Select Committee said: “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 to just 5%.
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.”
From April this year the LHA rate will once again cover the bottom 30% 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.