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 the Government's plan 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 £800 million in Discretionary Housing Payments provided to local authorities to help support vulnerable claimants.
In addition, I am assured that around 30 per cent of potential savings from the LHA freeze will be used to create further Targeted Affordability Funding to help tenants in those areas where local housing allowance rates have diverged the most from local rents. I welcome that this has already been used to increase 48 LHA rates by 3 per cent in areas with high rental costs this year. The recent Budget announced additional funding of £40 million in 2018-19 and £85 million in 2019-20. This will increase the housing benefit awards of 140,000 claimants next year, by an average of £280 in areas where affordability pressures are greatest.
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, which was published in February last year, outlined an ambitious plan to fix the broken housing market and build the homes Britain needs. This includes getting the right homes built in the right places, speeding up house building, and diversifying the market. I was encouraged that further proposals in the recent 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.
Updated: October 2018