Helen Barnard, Deputy Director of Policy and
Partnerships said:
“The Government’s decision to lift the freeze on
Local Housing Allowance is a step in the right direction, and we
welcome this signal of a new approach for the decade ahead. But
on its own this move won’t be enough to free people from being
pulled into poverty and homelessness by high housing costs. To
halt homelessness and free people from in-work poverty, the
Government must use the next Budget to ease the pressure on
households struggling with high housing
costs.
"Re-setting Local Housing Allowance rates to cover
the bottom third of local rents would give people on low incomes
the lifeline they urgently need when they’re being swept into
poverty by rising rents. To turn the tide in the longer term we
also need significant investment to increase the supply of truly
affordable social housing. Without this, gains created in other
areas, like higher pay and lower wages, will continue to be
lost.”
Below are two examples of how the end of the
freeze would impact on low-income households’
finances.
Case study one: a
single parent of a 3-year-old, working 16 hours a week on minimum
wage, and privately renting a two bed house in
York.
Assuming their weekly rent is the average rent of the
cheapest third of 2-bed properties, this family’s housing benefit
is currently £20.26 short of what they need to cover their rent.
After the proposed increase to LHA and the increase to minimum
wage, this family would still have a weekly shortfall of £15.14
(or £790 a year).
Case study two: couple
parents of a 3 and 8-year-old privately renting a two bed house
in York. Together they work a full time (35 hours) and part time
(16 hours) job on minimum wage.
Assuming their weekly rent is the average rent of the
cheapest third of 2-bed properties, this family’s housing benefit
is currently £20.26 short of what they need to cover their rent.
After the proposed increase to LHA and the increase to minimum
wage, this family would still have a weekly shortfall of £10.65
(or £555 a year).
