Landlord and tenant groups have welcomed proposals by MPs on the Work and Pensions Select Committee (pictured) to introduce an annual ‘uprating guarantee’ to the Local Housing Allowance (LHA).

Under these recommendations, the government would have to set out its reasoning to Parliament if it decided not to increase LHA each year in line with the 30th percentile of local rents.

LHA will be uprated from 1st April following a freeze since April 2020; since then, the proportion of new private rental properties listed on Zoopla affordable for those in receipt of LHA has fallen from 23% to just 5%, according to the Institute for Fiscal Studies.

Ben Twomey, chief executive of Generation Rent, believes the proposals are welcome and long overdue.

However, he adds: “The reliance on LHA is a concern and leads to the government effectively subsidising sky-high rents and putting money straight into landlords’ pockets.

Slam brakes

“The government must slam the brakes on soaring rents to give renters the breathing space we need during the cost-of-living crisis.”

NRLA chief executive Ben Beadle says that too often, the housing benefit system has left tenants and responsible landlords not knowing if rents can be covered from one year to the next.

“What should be a safety net has become a source of frustration and anxiety,” says Beadle.

“All parties need to provide certainty for those reliant on benefits that they can keep a roof over their heads by ensuring rates permanently remain linked to market rents.”

According to the 2022-23 English Housing Survey, 1.1 million private renter households received housing benefit to help with paying rent.

The Institute for Public Policy Research has warned that even when the rate is unfrozen next year, more than 800,000 households on Universal Credit will continue to face shortfalls.