Hard-up families who rent their homes may be facing higher costs after the Government confirmed that it is freezing Local Housing Allowance.
Most benefits will rise from next April in line with September's 10.1%. inflation rate, but the news that LHA will not be reviewed means that households who claim Universal Credit may have to face a real-terms cut to their budgets.
LHA was introduced in 2008 and calculates the maximum amount people renting from a private landlord can claim in Housing Benefit or Universal Credit. It is estimated that around 844,000 households now have rents above the maximum level that LHA will cover, and have to find the extra money from their household income to 'top up' their rent payments.
Read more: DWP benefit payment dates and money changes you can expect between now and Christmas
The Department for Work and Pensions (DWP) uses Local Housing Allowance rates to calculate Housing Benefit for tenants renting from private landlords. LHA rates relate to an area in which a claim is made. The news that the LHA rate will be frozen means that it will not keep up with increased rents, meaning that families will have to find more money to pay the shortfall between their LHA rate and their actual rent.
What you get through the allowance will depend on the area you live in and the size of your rented property. For instance, the three-bedroom weekly rate for Newcastle, Gateshead and North and South Tyneside is £126.58, whereas families living in County Durham will only get £103.56. The weekly rates for Northumberland and Sunderland for a three-bedroom home are £109.32 and £113.92 respectively.
LHA rates are set for 12 months and change on April 1 each year, but although Work and Pensions Secretary Mel Stride promised to look “very closely” at LHA when he reviews the benefits next, he said the next time he will look at it would not be until “in about a year’s time”.
A government spokesman told The Sun: “During the pandemic we increased Local Housing Allowance significantly and beyond inflation, benefiting over one million households by an average of over £600 over the year. We’re maintaining that boost, keeping support for private renters above pre-pandemic levels."
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