You are here: Home - Household Bills - News -

Backlash over government’s decision to freeze renters’ benefits

0
Written by: Samantha Partington
26/11/2020
Chancellor Rishi Sunak’s decision to cut tenants’ housing allowance from next year has come under fire.

The Local Housing Allowance (LHA) has been a lifeline for struggling renters and landlords during the coronavirus pandemic.

The allowance, available to tenants in the private rented sector, was last set in April to cover the lowest 30% of rents in any area.

Published alongside today’s Spending Review, however, were plans to freeze the allowance in cash terms from next year, rather than permitting the allowance to increase in line with inflation.

The National Residential Landlords Association (NRLA) is warning that the announcement is a blow for both renters and landlords struggling with the consequence of rent arrears through no fault of their own.

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

In its report, the Office for Budget Responsibility said the decision to freeze the allowance in cash terms meant the original £1bn cost of the measure in 2020/21 would decline to £0.3bn by 2025/26 and LHA rates would fall back below the 30% of cheapest local rents over time.

Recent analysis by the Joseph Rowntree Foundation suggested that 5% (200,000) of households in the private rented sector are in arrears. Some 30% of all private rented households are worried about paying their rent in the next three months, compared to 19% immediately pre-Covid-19.

Ben Beadle, chief executive of the NRLA, said: “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.

“While 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.”

Related Posts

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape for summer, and moving your cash savings to a higher paying deal is ...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
BLOG: Riding the waves of 2020

As we continue riding the 2020 waves of stock market volatility, we should beware. Brexit, coronavirus and Biden are considerations...

Close