LHA fails to align with private sector rents, warns CIH

Terrie Alafat
Terrie Alafat

Tenants who receive the Local Housing Allowance (LHA) face an increasingly widening gap between the help with their housing costs and the actual rent they pay, new Chartered Institute of Housing (CIH) research has found.

Analysis conducted by CIH which focused on LHA rates since 2012 found that in some areas of the UK, people are only able to afford to rent in the bottom five or 10 per cent of the private rented sector (PRS) market.

However, the LHA rates were originally intended to ensure that people could access 30 per cent of the market. The situation is set to worsen as LHA rates freeze for four years from April 2016.

The cash shortfall affects tenants across the UK, the study has found. In Aberdeen, there are very severe cash shortfalls in every LHA category, and in Northern Ireland, 80 per cent of LHA rates have already fallen below the bottom 30 per cent of the market - second only to England.

In Newport, South Wales, the LHA shared accommodation rate would need to be set at £29 per week more for people under 35 to be able to afford the whole of the lowest 30 per cent of the market. In England, the LHA rate for Chesterfield’s broad rental market area is even lower than the lowest rent that the rent officer could find in their market evidence data - in other words, there’s no shared accommodation available at the LHA rate.

CIH chief executive, Terrie Alafat CBE, said: “We are becoming more and more concerned by the lack of correlation between LHA rates and rents, and our research shows that people are going to find it difficult to continue renting in the PRS.”

She added: “CIH is calling on the government to review LHA rates for all categories of accommodation, to make sure everyone is able to access a safe, affordable home.”

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