Private tenants will suffer due to benefits freeze.
UK low-income tenants risk losing their homes.
UK low-income tenants will run out of £ 1,000 from next month as the government will quietly impose a cut in real terms in housing benefits, according to research by The Observer.
Starting in April, the government will freeze the amount of the local housing allowance (LHA), which means that tenants will receive the same amount of money as last fiscal year, even when rents have increased. The LHA is paid to tenants of privately rented homes, including those with universal credit.
In some parts of the country, renters will lose more than £ 1,000 a year as a result of a combination of rising rents and the new benefits freeze, Observer’s analysis of government data shows. Affected tenants will have to find the money elsewhere or face mounting rent arrears.
More than 500,000 private tenants are having trouble paying their rent.
There is already evidence of a delinquency crisis, and Citizens Advice estimates that half a million private tenants are behind on rent. The ban on most evictions, imposed at the beginning of the pandemic, was extended last week until the end of May.
“The LHA rate freeze is another example of government neglect of tenants; this will force many out of the private sector and onto the streets, and will force many more to choose between feeding their families and paying rent.” Nick said. Ballard, lead organizer for the Acorn Tenants Union.”
Until 2011, LHA had an average private rental limit in a local area – the 50th percentile of local rents for each type of accommodation, such as shared or two-bedroom properties. LHA covered 100% of the rent up to this level, while tenants with higher rents had to cover the difference.
But the government lowered this to the 30th percentile in 2011, which was further eroded by a four-year freeze, a cut in real terms, from 2016. At the start of the pandemic, nearly 70% of private tenants in LHA were left with a shortfall in rent.
The March 2020 budget restored the link to the 30th percentile and many more tenants are fully covered by the benefit as a result, but the new freeze, which was announced for one year, will erode it again. The government says the freeze will protect payments to tenants in areas where rents are falling. But official data shows that, in most areas, the 30th percentile of rents has risen.
In only 11 of the 193 “large rental market areas” in England, Wales and Scotland are there no tenants facing a growing deficit due to the LHA freeze. Flat sharers in 52 areas and one-bedroom renters in 58 face deficits increasing by at least £ 200 a year.
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