22 November 2023 , 14:35
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Chancellor Jeremy Hunt has provided a little support to those renting in the UK, after announcing a rise to Local Housing Allowance (LHA) rates.
It's the first time the allowance has increased in three-and-a-half years, and will impact 1.6million people across the country. The LHA was increased to the 30th percentile of local market rents, and would come into force in April 2024.
It means that the lowest-income households will be about £800 a year better off, the government claimed. The move was a direct response to the rising cost of living, according to the Chancellor, alongside the ongoing cost of living payments.
Local Housing Allowance (LHA) sets the maximum amount people renting from a private landlord can claim in Housing Benefit or Universal Credit. The amount renters can claim entirely depends on the location of their home, as well as the size of the property.
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Mr Hunt said: "I have listened closely to many colleagues as well as the Institute for Fiscal Studies, the Resolution Foundation, Citizens Advice UK, and the Joseph Rowntree Foundation (JRF) who said unfreezing the Local Housing Allowance was an ‘urgent priority’. I will therefore increase the Local Housing Allowance rate to the 30th percentile of local market rents. This will give 1.6million households an average of £800 of support next year."
The previous LHA has been frozen since 2020, but the cost of renting in the UK has significantly increased over the period. The JRF's senior economist, Rachelle Earwalker, said the move would help some renters to keep their homes for longer.
She posted on X, formerly known as Twitter: "Breathing a sigh of relief that LHA will finally be unfrozen and will cover the 30th % of rents again. While this doesn't make up for the 3.5 years of being frozen as rents have soared and renters have struggled to pay bills, it will help renters keep their homes going forward."
You can check your LHA rates here.