New Local Housing Allowance rates to come into force in
April as legislation being laid in parliament.
£7 billion investment over the next five years means 1.6
million private renters on Universal Credit or Housing Benefit
will be around £800 better off a year.
Comes as National Insurance cut comes into effect –
meaning households with two average earners will save nearly
£1,000 per year.
Around 1.6 million private renters are set to receive a
substantial boost to their housing support in April, as the
Government lays legislation to increase Local Housing Allowance
(LHA).
The boost will benefit some of the poorest families on either
Universal Credit or Housing Benefit who will gain around £800 a
year on average.
The support worth over £7 billion over the next five years comes
as the government publishes the proposed LHA rates for 2024/25,
with people living in the most expensive areas set to see the
biggest boost.
The increase to the LHA has been welcomed by many housing and
homelessness organisations and is part of the Government’s £104
billion cost of living support package – worth an average £3,700
per household. This also includes raising benefits by 6.7%, the
state pension by 8.5%, and £300 cost of living payments, with
over 7 million households receiving the latest payment and
another payment coming in Spring. Whilst more than 26 million
payments totalling over £2 billion to help families with
essentials have been made since October 2021 through the
Household Support Fund.
This additional support comes as 27 million people are set to get
a significant tax cut as the main rate of employee National
Insurance will be cut from 12% to 10%. This reduces National
Insurance by more than 15% in total, saving £450 this year for
the average salaried worker on £35,400.
Work and Pensions Secretary said:
“Housing costs are the number one expense for families. This £7
billion boost to Local Housing Allowance over the next five
years, along with our landmark Back to Work reforms, reflects our
fair approach to welfare – helping people into employment while
protecting the most vulnerable with unprecedented cost of living
support.”
Minister for Disabled People Health and Work said:
“Keeping inflation down and supporting people to stay and
progress in work is the best way we can bolster families'
finances and help them progress, but we know some are still
struggling which is why we are providing this important extra
help.
“This key boost to our housing support will see average renters
around £800 better off. It is just one crucial part of our £104
billion package to help the most vulnerable which also includes
an increase to benefits in line with inflation and our latest
series of cost of living payments.”
Crisis Chief Executive Matt Downie said:
“It cannot be understated just how vital this investment in
housing benefit will be in helping to both prevent and end
homelessness.
“In recent years, people receiving housing benefit have found it
increasingly difficult to afford the soaring cost of rents.
Giving housing benefit this crucial boost will make a real
difference to people across Great Britain and will relieve some
of the pressure facing people on the lowest incomes.
“We hope this investment will be maintained for the long term, so
we can continue with our collective mission to end homelessness
for good.”
The investment comes on top of the £30 billion support the
government is providing over 2023/24 on housing support.
Minister for Levelling Up said:
"This funding boost is just one part of how we’re supporting
people in the private rented sector with the cost of living.
"We have already invested £30 billion in housing support, along
with Discretionary Housing Payments which provide an added safety
net for anyone struggling to meet their rent.
"We are taking the long term decisions needed for a better
private rented sector, through our Renters Reform Bill, giving
tenants security and supporting good landlords.”
The government is also tackling homelessness with the £654
million Homeless Prevention Grant, giving councils in England
vital money and support to prevent and tackle homelessness, as
well as developing the Homelessness Covenant with Crisis.
The Local Housing Allowance determines the maximum housing
support for private renters. It ensures that claimants in the
same area with similar situations are entitled to the same
maximum support regardless of the rent they pay. The level of
support is based on the area where the person lives and the size
of their household.
ENDS
Notes to editors:
