Around 900,000 people across the UK could see their Housing Benefit payments rise from April, after the Government confirmed its decision to lift the freeze on Local Housing Allowance rates.

The freeze has been in place since 2016 but the decision means that LHA rates will rise by inflation from April. Most claimants will see the amount of housing benefit they receive rise by about £10 per month.

Housing charities and campaigners welcomed the lifting of the freeze but were vocal in attacking the decision not to backdate it, or to restore the direct link between LHA and local rent levels.

An unexpected source of some criticism was the Residential Landlords Association. Its policy manager, John Stewart said: “The benefit level needs to reflect the realities of the level of rents locally. A rise of 1.5 per cent is not going to be much help to a tenant struggling to afford the rent.

“If it really wants to help tenants, the Government should restore the direct link between rent levels and the LHA instead of a paltry flat rate increase.”

Link to cheap rents

Between 2016 and now, private sector rents have increased at a minimum of five per cent a year making it ever more difficult for people on low incomes to find accommodation they can afford.

LHA was introduced in 2008 and originally it was used to calculate housing benefit payments for welfare claimants living in privately rented housing. Until 2016 it was linked to the cost of cheapest 30 per cent of private rents in an area.

But that direct link was broken in 2016 by the decision to freeze LHA rates, along with many other welfare benefits.

According to Chartered Institute of Housing research published year, in two-thirds of Scotland, four-fifths of Wales and an unbelievable 97 per cent of England LHA covered only the cheapest 20 per cent of private rented homes. In some places LHA would not cover rents on even the cheapest properties.

This has also meant tenants faced shortfalls of hundreds, even thousands, of pounds a year in their rent. This has forced them into making difficult decisions over whether they pay for necessities like food, heating or their rent.

It also contributed to a significant increase in reliance on foodbanks and a growth in evictions and homelessness. Single people under 25 have been hit particularly hard, because they are only entitled to LHA to cover the rent on a bedroom in a shared home.

Drop in the ocean

Jon Sparkes, chief executive of the charity Crisis said: “It’s extremely disappointing to see the Government’s decision to only raise housing benefit in line with inflation, following years of cuts. It is just a drop in the ocean to what we know families need.

“Right now across the country, people are battling to keep their head above water by going without food or missing a crucial bill payment just to be able to pay their rent. No one should be forced to live like this, especially when we know we have the means to fix it.

“Our research shows that by investing in housing benefit, so it covers the true cost of rents, the Government could lift more than 35,000 children out of poverty.

“Ultimately, making sure that everyone has a safe and secure home benefits us all. This is a missed opportunity for the government to put their money where their mouth is and provide struggling families with a life line. It’s vital that the Government restores housing benefit to cover the cheapest third of rents.”

Decision defended

The Government defended its decision with Minister for Welfare Delivery, Will Quince, saying: “The Government is levelling up opportunity across the UK, and this will be a welcome increase for around 900,000 people as we provide more money to help pay for housing.

“We are committed to tackling all forms of homelessness – ending the freeze on housing benefits is just one part of achieving this. We have announced an additional £263 million to help councils provide better support to homeless people, and importantly, prevent people from becoming homeless in the first place.”

He added that since 2011, the Government has provided local authorities with over £1 billion in Discretionary Housing Payments to protect the most vulnerable claimants. An additional £40 million was also made available for next year’s Discretionary Housing Payment fund to help affordability in the private rented sector.

By Patrick Mooney, Editor