Private renters on low incomes now facing gaps of up to £260 a month between housing benefit and cheapest rents, new CIH research reveals.
The benefit freeze is now putting thousands at risk of poverty and homelessness and should be ended CIH says.
CIH research reveals more than 9% of Local Housing Allowance (LHA ) rates across Great Britain now fail to cover the cheapest rents, as they were originally designed to do.
LHA rates were frozen for four years in 2016 and CIH is warning that they have fallen so far behind even the cheapest rents that private renting has become unaffordable for most low income tenants – putting them at risk of homelessness as they are forced to choose between basic living expenses and paying the shortfall.
CIH chief executive Terrie Alafat CBE said: “Our research makes it clear just how far housing benefit for private renters has failed to keep pace with even the cheapest private rents.
2We fear this policy is putting thousands of private renters on low incomes at risk of poverty and homelessness.
“We are calling on the government to conduct an immediate review and to look at ending the freeze on Local Housing Allowance.”
CIH sees the policy is hitting single people aged under 25 particularly hard, because they are only entitled to LHA to cover the rent on a bedroom in a shared home – with even small gaps between their LHA and their rent can be serious because the levels of other benefits they may be entitled to – like Jobseeker’s Allowance – are also much lower.
CIH policy and practice officer Sam Lister, who wrote the report, said general benefit rates for single people aged under 25 are too low to contribute towards any gap without putting them at significant risk of homelessness.
CIH said their LHA rates should be restored to the 30th percentile rent with immediate effect.
LHA rates are meant to cover the cheapest 30% homes in any given area, but they haven’t been increased in line with local rents since April 2013 and they remain frozen until April 2020.
As a result, renters are facing gaps ranging from £25 a month on a single room in a shared home outside London to more than £260 a month on one to four-bedroom homes in some areas of London.
Over 12 months, those gaps rise to £300 and £3,120 – making it increasingly likely that renters will be forced to choose between paying for basic necessities like food and heating or their rent.
In Scotland, the research reveals renters across some broad rental market areas, including Glasgow and Edinburgh, are facing gaps of over £10 a week on a single room in a shared home, while tenants with properties of between one to four bedrooms have even larger gaps between LHA rate and rent.
Over 12 months, some larger properties in Glasgow and East Dunbartonshire will have a gap of over £1,000 – making it increasingly likely that renters will be forced to choose between paying for basic necessities like food and heating or their rent.
The government introduced targeted affordability funding in 2014 to bridge the biggest gaps but CIH’s new report has found that its impact has been negligible, covering only a handful of the shortfalls completely.
Matt Downie, director of policy and external affairs at Crisis, said the report highlighted just how much housing benefits for private renters are falling short of the levels needed, leaving many homeless people stuck in a desperate situation and putting yet more people at risk of homelessness.
“There are 236,000 people across Britain experiencing the worst forms of homelessness – this includes those sleeping on the streets, living in unsuitable hostels, and sofa-surfing – in many of these cases, people simply can’t find a home because there isn’t enough social housing and housing benefits are too low to cover private rents.
“Homelessness is not inevitable – there is clear evidence that it can be ended with the right policies in place. The government must urgently reform housing benefits for private renters, so they not only match the true cost of renting but also keep pace with future rent changes,” he said.
Backed a thaw, RLA policy director David Smith said the the report was a reminder of the difficulties being faced by young people especially in accessing homes for private rent.
“With many unable to afford a home of their own, and waiting lists for social housing remaining long, we need to do more to support those who desperately need a thriving private rental market to provide the homes they need and to sustain existing tenancies.
“This means lifting the Housing Allowance freeze so that it better matches the realities of today’s private rental prices,” said Smith.
“Such a policy would not lead to substantial increases in Government spending.
Official data shows that in the year to July 2018, private sector rents across Britain increased by just 0.9 per cent, far less than inflation,” he said.