Monday 27 May 2019

Local Housing Allowance

What is it?

LHA is the way in which Housing Benefit is calculated for private sector tenants.

As of April 2011 a number of changes have been made to the way in which LHA is calculated. These changes are as follows:

  •  The maximum payable rate has been lowered from the 50th percentile to the 30th percentile.
  •  Maximum weekly payable rate:
    • - For a one bedroom property it is £250 per week
      - For a two bedroom property it is £290 per week
      - For a three bedroom property it is £340 per week
      - For a four bedroom property it is £400 per week
  • Four bedroom rate is now the maximum payable.
  • Those under the age of 35 who do not have children are now only eligible for the Shared Accommodation Rate (SAR). As of January 2012 the age restriction for SAR increased from the age of 25 to 35.
  • Previously claimants of LHA if they had a rent lower than that of the LHA rent could keep the excess (excess limited to £15). From April 2011 this arrangement was removed.
  • Further change has been made to the size criteria so as to allow an extra bedroom for either a customer or partner who is disabled or has a health condition which requires over night care provided by a non resident carer.

The Impact 

Impact on Citizens

Impact on Councils

  • Research by Sheffield Hallam University[2] suggests that there may be up to 89,000 households affected by changes to LHA in the East Midlands (7.4% of the total for England).

 

  • The impact is likely to be highest in some coastal towns and urban areas where there is a strong reliance on private sector accommodation and where rent levels are generally higher.

 

  • Some councils have reported an increase in Local Housing Allowance Case Loads (Further detail in Figure 10.6).

 

  • Some councils have reported a sharp increase in applications for Discretionary Housing Payments since April 2013 (see below).

 

  • There will be an increased need for councils to address the under-supply of affordable housing.

 

  • Councils will need to develop localised initiatives to address the needs of the working poor.


[2] The Local and Regional Impact of Welfare Reform, Sheffield Hallam University, CRESR, April 2013