English | Cymraeg Tel: 029 2076 5760 Connect: Twitter

More social tenants affected by LHA cap

Community Housing Cymru (CHC) has criticised a Westminster government decision that means more social housing tenants will see their housing benefit capped at local housing allowance (LHA) rates.

In a written statement on the policy for general needs housing, work and pensions secretary Damian Green said that there will be ‘a simplification and alignment of the application of the Local Housing Allowance policy for general needs accommodation, in light of the changes that have been made to supported housing’.

The change means that the LHA cap will apply from 2019, a year later than previously announced, but it will also apply to existing claimants of universal credit. This is in line with the decision for supported housing. LHA rates are frozen until 2020.

Concern is greatest for single people under 35, most of whom will be subject to the LHA’s shared accommodation rate (SAR). As detailed in a feature in the current issue of WHQ, weekly shortfalls against the average one-bed social rent range from £4.32 to £25.63 in Broad Rental Market Areas in Wales. Shortfalls are more than £20 a week in Brecon and Radnor, Vale of Glamorgan, Rhondda Cynon Taf, Merthyr Tydfil, Torfaen and Monmouthshire. As Anna Clarke reports, the cuts will forced shared housing on to the social housing agenda.

The key changes announced for general needs tenants on Monday are:

  • The LHA will apply to existing universal credit claimants from 2019.
  • The LHA will apply to new and relet tenancies signed after April 2016 with the reduction in benefit entitlement being implemented from 2019
  • ]The LHA will apply to tenants moving from housing benefit to Universal Credit after 2019 but transitional protection will be applied.
  • Tenants moving from HB to Universal Credit between now and 2019 will be subject to LHA rates. No transitional protection will be available.

Stuart Ropke, chief executive of CHC, said: ‘This policy is bad news for tenants. Many people will be forced to make very difficult decisions about how they could make up the shortfall between what they received in benefits and their rent. It is now crucial that transitional protection is available for all who need it and who will be affected by this policy in Wales.

‘Our members will continue to support tenants, however it will also impact on them and their ability to invest in new and existing homes.  In recent years, Welsh housing associations have led the way in providing much needed social housing.  If their rental income is affected by this change to benefits they will undoubtedly have less money to spend.’

Clarissa Corbisiero-Peters, director of policy at CHC, said: ‘We also have real concerns about the way the LHA rates are set, and that in many areas, it does not reflect the true cost of housing.

‘The UK Government has also frozen the LHA rate until 2020 and today’s announcement will mean our work on ensuring the LHA rate reflects the local market will be more important than ever, as will ensuring any Welsh Government rent policy is fit for purpose. We need a new system that works for tenants and housing providers that genuinely reflects the local housing market.’

CHC said the decision would affect tens of thousands of tenants. Some 239,980 people in Wales claim housing benefit, with an estimated 99,530 renting from a housing association.

Sign up to our email newsletter

Every two months we'll email you a summary of the latest news & articles on the WHQ website. Better still, if you're a fully paid up magazine subscriber, you'll get access to the latest members-only articles as well.

Sign up for the email newsletter »

Looking to advertise in our magazine?

Advertising and sponsored features are a great way to raise your profile with our readership of housing and regeneration decision makers in Wales.

Find out more »