JRF says Rachel Reeves has ‘perfect opportunity’ to make change in budget
Tens of thousands of private renters will be pushed into poverty unless the chancellor unfreezes Local Housing Allowance (LHA), according to a charity.
The Joseph Rowntree Foundation (JRF) has urged Rachel Reeves to re-link the allowance to local rents in the upcoming budget.
Research commissioned by the organisation and conducted by Manchester Metropolitan University found that the last 14 years of changes to the LHA had made private renters £684 per year on average worse off.
The LHA was introduced in 2008 and initially covered 50% of private market rents, but was lowered to cover the 30th percentile of rents in 2011.
Further changes saw the allowance frozen, including for three years from 2020. Last year, then-chancellor Jeremy Hunt reset rates to the 30th percentile but they will remain frozen at that level in cash terms unless the new government decides to change them.
“The Autumn 2024 Budget is the perfect opportunity to commit to permanently re-link housing benefits to local rents,” said the JRF.
Around half of all private renters in receipt of housing benefits are now in poverty, and, according to the JRF, 50,000 more would be pushed into this position if the rate remains frozen over the parliament.
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A further 60,000 would be pushed into “deep poverty” and 80,000, including 30,000 children would move into “very deep poverty”.
“If the Government is serious about ending the need for emergency food parcels and tackling child poverty and homelessness, the right thing to do is to permanently stop the freeze and re-link housing costs to housing support,” the JRF said.
The charity suggested that the rate should be permanently set to cover the 30th percentile of market rents.
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