Local Housing Allowance

Around 12,000 young people could be facing a shortfall up to £8.6 million through UK Government plans to introduce Local Housing Allowance (LHA) rates to the social rented sector.

The UK Government propose to cap the housing element of Universal Credit for social housing tenants at LHA rates, including for those living in supported accommodation.  This could lead to single people under 35 facing a substantial shortfall on their rent, facing increased rent arrears and a risk of homelessness, as their allowance will be capped at the Shared Accommodation Rate.

The Scottish Government and COSLA have written a joint letter to David Gauke MP urging him to rethink the policy.

Cabinet Secretary for Communities, Social Security and Equalities Angela Constance said:

“We have already seen evidence from the Chartered Institute of Housing highlighting the impact that the next round of harsh welfare cuts from the UK Government will have – this time on younger, single people who may also face getting into debt or even losing their home. We share the concerns that so many have around the potential impact of these cuts.  

“These damaging cuts are expected to remove millions of pounds in welfare from a group of young people who rely on these benefits. Those affected will largely already be in some of the cheapest accommodation available, leaving few options for social landlords or tenants to mitigate the impact.

“The UK Government must take these concerns into account and should not apply the shared accommodation rate in the social sector.”

Background

The UK Government has made various proposals and amendments to cap the housing element of Universal Credit for social housing tenants at LHA rates, including for those living in supported accommodation.

The proposals are intended to bring payments for social housing tenants in line with those living in the private rented sector. The cap also applies to temporary accommodation. However, as the proposals currently stand, single people under 35 years of age will see their allowance capped at the Shared Accommodation Rate (SAR). The SAR is not expected to apply to households in supported accommodation, and a new funding model is expected to support this accommodation, but details have yet to be announced.

The full report is available from the Chartered Institute of Housing