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Housing allowance freeze could see spike in homelessness among private renters

Councils have warned minsters that reducing housing allowance for renters is likely to drive many people out of their homes and onto the street.

Low-income families in the private rented sector would see their benefits stay at the same level despite an 11% increase in rents across England over the past five years.

A new survey of councils by the LGA revealed that 96% of respondents are concerned that “homelessness would increase”, and 94% said it would be “more difficult to meet the requirements” of the new Homelessness Reduction Act, if the freeze on the Local Housing Allowance (LHA) was not lifted.

In addition, 92% of councils surveyed agreed that lifting the freeze and realigning rates would definitely reduce homelessness in their borough.

DCLG figures show that local authorities are currently housing more than 77,000 homeless families in temporary accommodation including more than 120,000 children.

Cllr Judith Blake, the LGA’s housing spokesperson, urged the government to scrap the freeze for private rented accommodation in the same way it recently changed supported housing benefits.

She continued: “At the root of the 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% of Right to Buy receipts in his Autumn Budget, enabling councils to borrow to build once more, and trigger the renaissance in council housebuilding that we desperately need.”

London’s Chamber of Commerce and Industry recently called on the government to allow authorities in the capital to borrow money for house building.

The lack of new homes in the UK has caused widespread problems for councils and, along with the reduction in benefits that low-income families can receive, has made it much more difficult to provide appropriate homes for vulnerable people.

Pilot councils for Universal Credit reported an increase in this issue – with the new system causing rising rent arrears because of major delays in access to money.

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