Landlords have sharply criticised Chancellor Rishi Sunak for cutting the amount tenants relying on benefits will be able to claim to pay their rent.

The small print of Sunak’s Spending Review, delivered in the House of Commons yesterday, shows the lettings fallout as being far less rosy than the Chancellor suggested to MPs.

According to a report by the Office for Budget Responsibility published alongside the review, the Local Housing Allowance will be frozen in cash terms from next year. 

This means that the rate will fall below the current level which is set to cover the lowest 30 per cent of rents in any given area.

The National Residential Landlords Association is warning that the announcement represents a kick in the teeth for both renters and landlords struggling with the consequence of arrears through no fault of their own.

The current LHA rate was set in April this year to help renters whose incomes had been affected by the pandemic to meet the cost of their rents. 

A recent analysis by the Joseph Rowntree Foundation suggests that five per cent of households in the private rented sector are in arrears. And 30 per cent of all private rented households are worried about paying their rent in the next three months, compared to 19 per cent immediately pre-Covid-19.

The NRLA says the vast majority of private landlords have done everything they can to support struggling tenants. 

Now an angry statement from the association comments: “However, given that most landlords are individuals and not property tycoons it will become increasingly difficult to keep affected tenancies going without adequate financial support to pay off rent arrears.”

Ben Beadle, NRLA chief executive, adds: “Many renters and landlords are struggling with the consequence of rent arrears through no fault of their own yet the government is failing to take the action needed to address this.

“Whilst the Chancellor has spoken about the need to support those who find themselves homeless, it would be much better for all concerned to provide the funds needed to sustain tenancies in the first place.”