LHA freeze risks increasing homelessness

The Local Government Association (LGA) has warned that the freeze on Local Housing Allowance (LHA) risks an increase in homelessness in the private sector.

Councils have warned the Chancellor to use the upcoming Autumn Statement to lift the LHA freeze in the private rented sector, and follow the action already taken to not apply the restrictions to social and supported housing.

The LHA is paid to low-income families in the private rented sector to help them cope with high housing costs. However, private rented sector rents in England having risen by nearly 11 per cent in the last five years.

An LGA survey has revealed that 96 per cent of authorities are concerned that ‘homelessness would increase’, with 94 per cent saying it would be ‘more difficult to meet the requirements’ of the new Homelessness Reduction Act, if the freeze on the LHA were not lifted up until 2020.

Councils are currently housing more than 77,000 homeless families in temporary accommodation.

Judith Blake, the LGA’s Housing Spokesperson, said: “Councils want to end homelessness by preventing it happening in the first place. It is hugely positive that the government has decided not to apply the LHA rate to families in social and supported housing. We should now take the important step to lift the LHA freeze for private renters and connect it with real rents, which will be massive step towards achieving our national ambition to end homelessness.

“At the root of our homelessness crisis is our shortage of affordable housing. We are pleased that the government has acknowledged there is a need to build more council homes, but new homes will not appear overnight and the need is immediate. Without addressing the gap between private renters and LHA, the number of homeless families and children that councils will need to house in temporary accommodation will continue to increase, and our hopes to make a success of the Homelessness Reduction Act will fade.

“Councils want to build homes that their communities need. It is essential that the Chancellor lifts the housing borrowing cap and allows councils to retain 100 per cent of Right to Buy receipts in his Autumn Statement, enabling councils to borrow to build once more, and trigger the renaissance in council housebuilding that we desperately need.”