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.”

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.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

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.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week