The collective of London boroughs is calling on the government to unfreeze the rate of support for low income private renters as rents rise

A sign in a window reads 'for rent' — Photo by Robert Linder on Unsplash

Almost 60,000 Londoners living in the private rented sector are likely to become homeless over the next six years if the government maintains the freeze on Local Housing Allowance (LHA) according to new analysis for London Councils.

Amid worsening homelessness pressures in the capital, London Councils is urging the government to end the freeze on LHA. The policy measure is one of the group’s top priorities in its submission to the government’s upcoming Autumn Statement, which will set out future spending plans.

Local Housing Allowance (LHA) goes to eligible households as part of their housing benefit or Universal Credit payment to cover housing costs if they have a private landlord.

In independent research commissioned by London Councils from Alma Economics it is estimated an additional 16,500 to 22,000 London households will become homeless by 2030 unless LHA is raised.

London Councils calculates that 22,000 households equates to 58,740 individuals – including 28,000 children.

One in seven London private renters are reliant on LHA to meet their housing costs..

According to the 2021 census, 48,705 households were renting privately in Barnet when the census was carried out in March 2021 – 32.7% of the 148,917 households in the area.

Cllr Darren Rodwell, London Councils’ executive member for regeneration, housing & planning, said:

“Raising Local Housing Allowance is vital for getting a grip on the homelessness crisis.

“London’s homelessness pressures are already enormous and unsustainable. On current trends, almost 60,000 more London renters are set to become homeless in the coming years.

“London is the epicentre of the national homelessness crisis. The situation is increasingly unmanageable and requires urgent government action. We cannot continue in this disastrous direction.”

LHA was introduced in 2008 as a way of setting the rent element of housing benefit for tenants living in the private sector. In 2011 the government reduced the LHA from covering 50% of local market rents to the 30th percentile. Following this, the link between LHA rates and actual rent increases was broken when they were uprated by the Consumer Price Index (CPI) in 2013, prior to a 1% cap on uprating in 2014 and 2015, before a four-year freeze from April 2016.

In response to the Covid-19 pandemic, the government lifted LHA rates in April 2020 to cover the 30th percentile of local market rents. However, since this point LHA rates have once again been frozen – despite a dramatic rise in rents over the same period.

London Councils is the collective of local authorities in London.

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