A coalition of Welsh housing organisations is calling on the Westminster Government to end the freeze in Local Housing Allowance in next week’s Spring Budget.
The call from Homes for All Cymru comes as new research from the Bevan Foundation shows that just 1.2 per cent of private rented homes advertised in Wales are available at or below LHA rates.
LHA is meant to cover the cheapest 30 per cent of rents in any local area but rates have been frozen since April 2020, leaving tenants with growing shortfalls to make up out of their other benefits. The research shows that 16 out of the 22 local authority areas had no properties for rent fully covered by LHA.
Dr Steffan Evans, head of policy at the Bevan Foundation, said: ‘The latest findings make for extremely worrying reading. With so few properties available on the market at LHA levels many low-income tenants have little choice: move into a property that is unaffordable and risk financial hardship, move into a poor quality home, or become homeless.’
Background documents to UK chancellor Jeremy Hunt’s Autumn Statement in November implied that LHA rates will be frozen for the third year in succession despite warnings that the inevitable results will be increased rent arrears and homelessness.
Organisations across Wales are already reporting that the decision to freeze the LHA is having an impact on their services:
Ruth Power, CEO of Shelter Cymru and chair of Homes for all Cymru, said: ‘The inadequacy of LHA is pushing people into poverty and keeping people homeless. It is nigh on impossible to find somewhere affordable to live if you are a private renter who is reliant on LHA. At Shelter Cymru we are being contacted daily by people at their wits’ end, who are being forced into homelessness because they cannot find anywhere they can afford. In the midst of a cost of living crisis, the UK Government must listen to the growing call to unfreeze LHA.’
Debbie Thomas, head of policy and communications for Wales at Crisis, added: ‘These figures confirm what we are seeing in our Skylight centre in South Wales – too many people and families are being forced into homelessness because housing benefit simply isn’t sufficient to keep a roof over their heads.
‘It’s nearly three years since housing benefit was last increased and as the cost of living soars more people are left priced out of a home. This cannot continue. The UK Government must act now so that housing benefit can fulfil its purpose and protect those on low incomes.”
Support has also come from the leading membership organisation for letting agents. Propertymark’s head of policy and campaigns Timothy Douglas said:
‘Propertymark supports the Homes for All Cymru campaign to increase housing options for people on low wages and those on benefits by ending the freeze on Local Housing Allowance rates and uplifting this to the 30th percentile at the very least.
‘In our recent Spring budget representation to HM Treasury, Propertymark called on the Treasury to increase LHA levels to the 30th percentile if not the 50th percentile. We are also encouraging and supporting letting agents to submit their rental data to the Valuation Office Agency, to improve rental data to reflect fair LHA rates. We believe that letting agents have a vital role to play in improving data, but both the UK and Welsh Governments must make data collection as seamless as possible.’
The Bevan Foundation research found that only 32 properties in Wales out of 2,638 advertised in the period between February 3 and February 17 were available at rents fully covered by LHA rates. Of these, 14 were in Cardiff, 10 in Flintshire, four in Rhondda Cynon Taf, two in Powys and one each in Ceredigion and Conwy. There were none in the rest of Wales.
The Spring issue of WHQ, out next month, looks in depth at the state of the private rented sector and will include more on LHA.