Thank you for contacting me about the impact of the Local Housing Allowance (LHA) freeze.
While I appreciate your concerns on this issue, reforms to Housing Benefit are a central part of plans to create a welfare system that supports the most vulnerable and is fair to taxpayers.
Around £24 billion a year is spent on Housing Benefit to support people with their housing costs, with over £1 billion in Discretionary Housing Payments (DHPs) having been provided to local authorities to help support vulnerable claimants. In the recent Spending Round, the Chancellor announced a further £40 million of funding for DHPs, sending the annual budget up to £180 million from the £140 million spent this year.
I am assured that around 30 per cent of potential savings from the LHA freeze are being used to create further Targeted Affordability Funding, to help tenants in those areas where local housing allowance rates differ the most from local rents. This has been used to increase 361 LHA rates by 3 per cent in areas with high rental costs in 2019-20, including 16 rates in Scotland. This year £210 million has been invested in Targeted Affordability Funding. It is estimated that over 500,000 households will benefit from these increases in LHA rates, seeing a real increase of around £250 a year.
Ultimately, however, I believe the key to improving affordability in the private rented sector across England is to build more homes. That is why I am glad that the Housing White Paper outlined a plan to fix the broken housing market and build the homes Britain needs. I was encouraged that further proposals in 2018 Budget mean the Government is on track to increase the housing supply by 300,000 a year.
Thank you again for taking the time to contact me.
Craig Whittaker MP