LHA to Increase by CPI from April This Year
Will Quince MP, Minister for Welfare Delivery, announced yesterday that from April 2020, Local Housing Allowance (LHA) rates will be increased in line with the Consumer Price Index (CPI), ending the freeze to the Local Housing Allowance which has been in place since 2016.
The Government says this increase will mean the majority of people in receipt of housing support in the Private Rented Sector will see their housing support increase, on average benefiting by around £10 per month.
The latest CPI rate for November 2019 was 1.5 percent.
The Government also confirmed their September 2019 commitment to an additional £40 million in Discretionary Housing Payments (DHPs) for 2020/21, to help affordability in the private rented sector. This increases next year’s DHP budget from £140 million to £180 million.
Meera Chindooroy, Policy and Public Affairs Manager at the National Landlords Association (NLA), says:
“While we are pleased the Government will finally end the freeze on LHA rates, an inflation-based increase is insufficient to address the shortfall between LHA levels and market rents in many areas. The financial support offered by the Government is simply not enough for many tenants to cover their rent.
“Our research shows that a decreasing proportion of landlords are letting to tenants in receipt of local housing allowance or Universal Credit, and that there is a wide variation across the country. It’s vital the Government re-aligns LHA rates with current market rents, in order to ensure vulnerable tenants continue to be able to access properties in the private rented sector.”