An estimated 1.6m private renters are set to receive an uplift to their housing support for 12 months from April 2024, as the government rises Local Housing Allowance.
The increase will benefit some of the poorest families on either Universal Credit or Housing Benefits who will gain around £800 a year on average.
Propertymark, the letting agents’ trade body, has analysed the effect of LHA, which 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.
Subject to the benefits cap, Propertymark calculates that per month eligible renters could get up to the following:
- A four-bedroom property in Bristol = £1,850
- A two-bedroom property in Greater Glasgow = £850
- A one-bedroom property in Leeds = £675
Propertymark says it welcomes the increases but remains committed to improving LHA levels and would like to see it increased annually to keep up with market rates, rather than frozen again in 2025 as the UK Government currently intends.
Since 2020 LHA has increasingly lagged rising rents and effectively priced the most vulnerable tenants out of the market for private rented homes. We will continue to urge the UK Government to go further and increase the LHA level to the 50th percentile. This will ensure that tenants have wider access to secure and affordable housing options.
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While existing tenants may be temporarily better off if they've been funding a shortfall from other money the new rates are still well short of anything currently advertised on Rightmove.
In my area the new rates are:
One bed £628
Two bed £793
Three bed £947
Four bed £1296
The cheapest available rentals on Rightmove:
One bed £750
Two bed £850
Three bed £1100
Four bed £1600
The 30th percentile rent is significantly more than that, so yet again the government have messed this up. It's still going to leave any new renters or people needing bigger accommodation a long way short. Which year did the data come from that they have based these rents on? Presumably before mortgage rates started increasing. The figures are completely divorced from the current reality.
I do some benefit level letting so even at these increased rents I'm still going to be way below market rent. Three of my UC tenants will be better off as they won't be funding as big a shortfall. Two will be the same as I already do those rents at LHA so a rent increase to the new LHA won't impact them at all. Another two may be slightly worse off but they're both underoccupying.
On a positive note I will be more likely to have smaller rent increases for my self funding tenants. They've had the brunt of the rent increases over the last 16 months what with much higher utility bills for the HMOs and huge mortgage rate increases.
The LHA freeze meant their rent increases were bigger than they would have been if it had all been spread more evenly.
Too many people on Benefits, UC ‘ LHA milking the system blind, if it wasn’t so generous they might go to work & pay tax instead of unfairly burdening their fellow citizens paying to keep them.
London is particularly hit hard because property & most other things are more expensive, many families on Benefit too or topped up better off than tax payers.
Its interesting the property rental prices quoted which I don’t dispute.
Strange though the difference between a 1 bed Flat & a 2 bed Flat is £100.00 for the extra room but the difference between a 3 bed house & a 4 bed house is £500.00 for the extra room.
Totally agree, we are becoming drunk on welfare, dependant like a drug user and unable to break free. I see it in my job, dealing with people who have never worked, and frankly never will. The choices made by them were made in their teens and those decisions dominated their life from then on….. and it’s getting worse.
The whole UC system is a mess. All of my UC tenants are either working or signed off sick. There's a nurse, 2 cleaners, a supermarket manager and a plant fitter. All essential jobs that someone has to do. All jobs that don't pay enough to not qualify for UC if children are part of the household.
UC actively discourages people having a second adult in the household. The UC allowance for adults is woefully inadequate while for children they are so generous people either deliberately have extra children just to get more UC to spend on anything other than their children or get their partner to technically live elsewhere to maximise the UC claim.
I don't rent to benefit claimants.. Not because I disaprove of rent benefit but because of the stupidity of government policy on rent benefits.. The current payment of benefit is based on size of property rather than quality. This means slum landlords who neglect their property make more profit than decent landlords who maintain their properties. Instead of paying one level of benefit, there should be a higher rate for licensed properties. Licensing being voluntary and chargeable but free to a tenant who after moving in subsequently becomes dependant on benefits.. Licensing all properties is a complete waste of time & money... Gradually increasing the level of difference between the basic rate and the licensed rate would soon make being a slum landlord inviable.
Whilst a rise in LHA rates will help those already in a house who are making up the shortfall themselves, in the end higher LHA pushes rents up again, as more people can now afford the same amount of houses. The answer to ever rising rents is more supply - but we have no action on that at all!
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