Homelessness is at risk of increasing without further government
action to lift the freeze on Local Housing Allowance (LHA) for
families in private rented sector, councils warn today.
The LHA is paid to low-income families in the private
rented sector to help them cope with high housing costs. The rate
is currently frozen despite private rented sector rents in
England having risen by nearly 11 per cent in the last five
years.
The Local Government Association, which represents more
than 370 councils in England and Wales, said the Government’s
decision to accept its call not to apply the restrictions to
social and supported housing is a crucial step.
It is now calling on the Chancellor to use the Autumn
Statement to go further and lift the LHA freeze in the private
rented sector, so that they can reduce homelessness by preventing
it happening, and work with landlords to provide suitable housing
for those that need it.
A new survey of councils by the LGA reveals 96 per cent of
responding councils are concerned that “homelessness would
increase”, and 94 per cent said it would be “more difficult to
meet the requirements” of the new Homelessness Reduction Act, if
the freeze on the LHA were not lifted up until 2020.
As rents go up, the freeze on the level of Housing Benefit
makes private renting less affordable for many families at risk
of homelessness. Nine in 10 councils say private landlords in
their area are renting fewer homes to low income
households.
Ninety two per cent of responding councils said that
lifting the freeze on LHA rates and better aligning them with
rents would reduce homelessness.
With the unaffordability of private rented housing the
current leading cause of homelessness, councils are warning that,
without action to lift the freeze for private renters,
homelessness will continue to increase. The Government’s ambition
to successfully deliver the Homelessness Reduction Act may also
not be achieved.
Councils are currently housing more than 77,000 homeless
families in temporary accommodation including more than 120,000
children.
Cllr , the LGA’s Housing
Spokesperson, said:
“Whenever homelessness occurs, it’s a tragedy. Re-building
your life after losing your home requires support, and councils
do all they can to help people get back on their feet.
“Councils want to end homelessness by preventing it
happening in the first place. It is hugely positive that the
Government has decided not to apply the LHA rate to families in
social and supported housing.
“We should now take the important step to lift the LHA
freeze for private renters and connect it with real rents, which
will be massive step towards achieving our national ambition to
end homelessness.
“At the root of our homelessness crisis is our shortage of
affordable housing. We are pleased that the Government has
acknowledged there is a need to build more council homes, but new
homes will not appear overnight and the need is
immediate.
“Without addressing the gap between private renters and
LHA, the number of homeless families and children that councils
will need to house in temporary accommodation will continue to
increase, and our hopes to make a success of the Homelessness
Reduction Act will fade.
“Councils want to build homes that their communities need.
It is essential that the Chancellor lifts the housing borrowing
cap and allows councils to retain 100 per cent of Right to Buy
receipts in his Autumn Statement, enabling councils to borrow to
build once more, and trigger the renaissance in council
housebuilding that we desperately need.”
NOTES TO EDITORS
1. The
full survey is available upon request. 76 councils responded to
the survey.
2. Figures
revealing over 77,000 households are currently in temporary
accommodation come from the latest DCLG
statistics.
3. Local
Housing Allowance, or LHA, is paid to households who are renting,
to enable them to keep up with high housing costs. This is
currently frozen for private renters, whilst rents are expected
to rise by almost 5 per cent by 2020. More information on how
rates are set is available at the Gov.uk
website.
4. Increases
in private rents in England come from the ONS’ Private
Rental Index.
5. The
LGA’s Autumn Budget
submission includes proposals for how the
Government lifting the freeze on Local Housing Allowance could
support private renters
