Housing benefit is a state benefit designed to help people pay their rent if they’re unemployed, on a low income or claiming additional benefits. It is gradually being replaced by Universal Credit, which can also provide additional payments for rent and other housing costs.
Both of these benefits are impacted by LHA rates, which are used to calculate payments for tenants renting from private landlords.
LHA rates are based on private market rents being paid by tenants in the broad rental market area (BRMA), which is the area within which a person might reasonably be expected to live.
The payments will be limited by legislative changes and they are impacted by a number of variants such as the number of bedrooms in a property and where a person lives.
In recent months, the Government elected to use a certain benchmark for measuring LHA rates and following housing data released today, the state has been criticised for making changes that have damaged struggling consumers.
READ MORE: DWP updates benefit deduction rules as rent & utility debts are frozen
Housing market data released today showed house prices and private rents are continuing to rise rapidly, with the largest annual rise seen since 2007.
Rachelle Earwaker, an Economist at the Joseph Rowntree Foundation (JRF), reflected on the data and broke down the difficulties that may lay ahead.
She said: “The Government’s decision to extend the stamp duty holiday, a policy that is expected to cost almost £5billion in lost revenue, comes at the expense of support for households on low incomes who cannot afford to access home ownership, and who are struggling to stay afloat during the pandemic.
“The largest annual house price increase since 2007 will benefit existing homeowners but make it much harder for renters to get on the property ladder, because deposit requirements rise as at the same rate as house prices.
DON’T MISS:
Universal Credit claimants to be eligible for reduced BT deal [INSIGHT]
Universal Credit claimants may be taken to court – full details [WARNING]
Martin Lewis questions Rishi Sunak on Universal Credit [EXPERT]
“We know that significant numbers of renters are continuing to grapple with arrears.
“The Government has chosen to use September 2019 as a benchmark for the cost of renting and has frozen the support available to renters through the benefits system at the lowest third of average rents from this time.
“This does not reflect the current rental market, as rents have risen by over two percent since then and more than double that in some areas of the country.
“It is not right that the only support in the housing market goes to those who already own their own homes, or who are on the cusp of ownership.
New claims for housing benefit an only be made if either of the following apply:
- The claimant has reached state pension age
- They’re in supported, sheltered or temporary housing
Most claimants will now receive Universal Credit which is designed to cover essential costs such as rent, utility bills and childcare costs.
To be eligible for Universal Credit, a person must be on a low income or out of work entirely and be aged between 18 and state pension age.
On top of this, claimants must have less than £16,000 in savings and be living in the UK.
