With new data this week revealing that just one in 20 newly listed private rental properties on Zoopla in Q1 2023 was affordable typically for housing benefit or universal credit recipients, the government is being urged to do more to ensure Local Housing Allowance track rents.
Timothy Douglas, Propertymark’s head of policy and campaigns, was among a handful of experts invited to give evidence to the Department for Work and Pensions Commons Committee hearing on the current benefit levels in the UK this week.
He outlined the impact they are having on the private rented sector. Propertymark and other experts representing landlords, tenants, policymakers, and the homeless looked at a vast array of areas LHA’s impact those across the housing sector and we stressed that the DWP should engage more with landlords and recognise they are stakeholders in the housing allowance scheme.
The demand for rented property continues to outstrip supply in a highly competitive market. Evidence from a survey of Propertymark members shows that demand is up 24% in April 2023 compared to the previous year. Douglas stated that benefits are not keeping up with rising rent, and further pressure has been placed on the PRS because of low social housing stock, leading to vulnerable tenants being priced out of the market.
Timothy Douglas, Head of Policy and Campaigns comments: “The decision to phase out Mortgage Interest Relief and other unfavourable taxation policies is resulting in landlords facing unprecedented financial challenges. If a decision not to implement a pro-growth taxation agenda for the private rented sector is not brought forward, it will be the most vulnerable tenants who are negatively impacted, many of whom are in receipt of benefits.
“The UK government must increase housing options for the most vulnerable by setting Local Housing Allowance at the thirtieth percentile, if not the fiftieth, and to increase this annually to keep pace with market rents. A change in rhetoric is also needed with policymakers viewing private landlords and letting agents as part of the solution to resolve the housing crisis.
“After pressing them to do so, we are pleased to see that the Department for Work and Pensions is now investigating ways in which it can engage with membership bodies such as Propertymark and our partnership with the Valuation Office Agency will continue to ensure that letting agents provide rental data to support rent officer valuations and housing benefits.”
According to the Institute for Fiscal Studies (IFS), just one in 20 – 5% – newly listed private rental properties on Zoopla in the first quarter of 2023 was affordable typically for housing benefit or universal credit recipients,
“Frozen and falling” housing support and rising rents are behind the squeeze on the availability of affordable properties, it said.
The IFS, whose research was funded by the Joseph Rowntree Foundation (JRF), defined rents as being affordable if they could potentially be completely covered by benefits.
Darren Baxter, principal policy adviser at the JRF, commented: “As more people on low incomes rent privately, it’s crucial that the government unfreezes LHA and ensures it reflects market rents so that families aren’t forced to choose between homes that are unsafe or homes they can afford.”
A government spokesperson said: “We’re helping ease the pressure of rising rents by maintaining 2020’s £1bn boost to local housing allowance rates, giving more than a million people an extra £600 a year on average.
“We are set to spend over £30bn on housing support this year, on top of significant cost-of-living support worth an average £3,300 per household.
“Building more affordable homes is key, which is why we’re investing £11.5bn to deliver more social and affordable rented homes across the country.”
