NRLA Demands Chancellor Hunt to Address Local Housing Allowance Shortfall in Spring Budget

The National Residential Landlords Association (NRLA) has issued a call to Chancellor Jeremy Hunt, pressing for an overhaul of the current housing benefit system by closing the Local Housing Allowance (LHA) funding gap. With the Budget announcement on the horizon, the association is advocating for a system that aligns housing benefit rates with at least the bottom 30% of market rents for the duration of the next Parliament.

An NRLA examination of government figures reveals a stark reality: out of the 1.5 million privately renting households in Britain that receive Universal Credit, which includes housing cost support, two-thirds experience a gap between their LHA and actual monthly rent. This disparity affects nearly one million households, highlighting a critical issue in housing affordability.

After a freeze initiated in April 2020 disconnected benefit rates from the evolving market rents, the LHA rate is slated to revert in April to the lowest 30% of rents in any given area. However, this adjustment comes after a period where, as noted by the Institute for Fiscal Studies, only 5% of private rental properties were within the financial reach of those dependent on LHA. The Institute for Public Policy Research has further cautioned that over 800,000 households on Universal Credit will still face shortfalls post-unfreeze, with the situation expected to deteriorate due to another impending freeze of the LHA rates after April.

Ben Beadle, chief executive of the NRLA, voiced concerns over the recurring freezes and the uncertainty surrounding future rates, underlining the negative impact on both renters and landlords. He stated, “All parties need to commit to ensuring housing benefit rates permanently track average rents. This would end the bizarre and morally absurd spectacle of the support available being completely detached from the cost of housing for renters.”

This appeal to Chancellor Hunt comes at a critical time, as the NRLA seeks to ensure stability and security for renters and responsible landlords alike by advocating for a fair and responsive housing benefit system that accurately reflects the rental market landscape.