Wales Housing Crisis: The Role of LHA

Stockphoto from Alarmy
ReportsResourcesSeptember 23rd, 2021

Wales’ most influential think tank the Bevan Foundation warns that the Local Housing Allowance is leaving many low income renters short

New research by the Bevan Foundation has revealed that many Welsh households are struggling to find a home and pay their rent because of shortfalls in Local Housing Allowance.

The LHA is the maximum amount that people renting their home from a private landlord are able to claim from Housing Benefit or the housing element of Universal Credit. The LHA is designed to provide people with enough support to afford the cheapest 30 per cent of housing in an area, adjusted for household composition. New research undertaken by the Bevan Foundation in 10 Welsh local authorities has unearthed that this is far from the mark.

Over the summer of 2021 the LHA rate only covered the cost of rent in full of 4.8 per cent of homes advertised on the market across 10 Welsh local authorities. With so little choice on the market low income households are faced with a choice of moving into accommodation that they struggle to afford, moving into low quality housing or risk homelessness.

On average, there is a gap of £133.53 a month between the LHA rate and the cheapest thirty per cent of advertised rents for shared accommodation, and a gap of £308.71 for four-bedroom homes.

This problem is made worse by the actions of some landlords. Some landlords require tenants to have multiple references, raise excessive deposits or have minimum income requirements for prospective tenants. These requirements effectively act as a barrier to homes for people who receive help with their housing costs from Housing Benefit or Universal Credit. When accommodation with these kinds of barriers are taken into account, only 2.7 per cent of homes that were advertised on the market this summer were available to low-income renters.

There are concerns that the situation could deteriorate further with the LHA rate having been frozen at 2020/21 levels. This could lead to the proportion of homes fully covered by the LHA rate reducing further, putting extra pressure on households during what is set to be a challenging winter. 

Pages: 29

Format: PDF

Language: English 

Cost: Free



Tagged with: Poverty


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