Millions of households on Universal Credit and Housing Benefit will soon receive an increase in their housing support worth an average of £800, the DWP has said.
This comes as part of the Government’s plans to raise the Local Housing Allowance (LHA) rates in April, forming a crucial component of a £7billion investment over the next five years.
The Department for Work and Pensions (DWP) said the move is set to benefit around 1.6 million private renters, with people living in the most expensive areas due to see the biggest boost.
Mel Stride, Work and Pensions Secretary, said: “Housing costs are the number one expense for families.
“This £1.2billion boost to Local Housing Allowance, along with our landmark Back to Work reforms, reflects our fair approach to welfare – helping people into employment while protecting the most vulnerable with unprecedented cost of living support.”
The increase to the LHA has been welcomed by housing and homelessness organisations and is part of the Government’s £104billion cost of living support package – worth an average of £3,700 per household.
This also includes raising benefits by 6.7 percent, the state pension by 8.5 percent, and £300 cost of living payments, with over seven million households receiving the latest payment and another payment coming in Spring.
Subject to the benefits cap, the DWP said eligible renters of:
- A four-bedroom property in Bristol could get up to £1,850 per month.
- A two-bedroom property in Greater Glasgow could get up to £850 per month.
- A one-bedroom property in Leeds could get up to £675 per month.
Mims Davies, minister for disabled people, health and work said: “Keeping inflation down and supporting people to stay and progress in work is the best way we can bolster families’ finances and help them progress, but we know some are still struggling which is why we are providing this important extra help.
“This key boost to our housing support will see average renters around £800 better off. It is just one crucial part of our £104billion package to help the most vulnerable which also includes an increase to benefits in line with inflation and our latest series of cost of living payments.
Matt Downie, the chief executive at Crisis, said: “It cannot be understated just how vital this investment in housing benefit will be in helping to both prevent and end homelessness.
“In recent years, people receiving Housing Benefit have found it increasingly difficult to afford the soaring cost of rents. Giving Housing Benefit this crucial boost will make a real difference to people across Great Britain and will relieve some of the pressure facing people on the lowest incomes.
“We hope this investment will be maintained for the long term, so we can continue with our collective mission to end homelessness for good.”
What is Local Housing Allowance?
Local Housing Allowance (LHA) determines the maximum financial support available for renters in the private rented sector. The Secretary of State has committed to reviewing the level of LHA rates annually.
The Chancellor announced in the Autumn Statement that the Government will raise LHA rates in Great Britain to the 30th percentile of local market rates in April 2024.
The DWP uses LHA rates to calculate the maximum housing support for claimants of either the housing element of Universal Credit or Housing Benefit. LHA rates are set within Broad Rental Market Areas (BRMA).
A BRMA is an area within which a person could reasonably be expected to live, taking into account access to certain facilities and services, for example with regards to health and education. Within each BRMA there are 5 LHA rates:
- Shared Accommodation Rate (SAR)
- 1 bedroom rate
- 2 bedroom rate
- 3 bedroom rate
- 4 bedroom rate.
The full list of proposed rates can be found here.
