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The monthly magazine providing news analysis and professional research for the discerning private investor/landlord

Local Housing Allowance Freeze is Fuelling Homelessness, Warn Councils

New analysis by London Councils shows a significant reduction in the number of homes affordable to Londoners receiving Local Housing Allowance (LHA) over the past four years, with no properties affordable to claimants in certain parts of the capital.

People who are eligible for LHA receive it as part of their housing benefit or Universal Credit payment to cover their housing costs if they have a private landlord. London Councils has calculated that no more than 15% of private sector rents across the capital are covered by LHA rates. In areas such as Outer South West London, not a single property is affordable for single claimants looking for a room in a shared house.

London Councils’ research also found that almost half (45%) of the almost 200,000 low-income London households claiming LHA for private sector properties do not receive enough housing benefit to cover their rent.

These Londoners face an average shortfall of £50.71 per week, with households trying to bridge the gap through cutting back on essential spending such as food or utilities; or taking out loans. The financial pressures are pushing many into rent arrears, putting them in danger of becoming homeless.

London Councils’ analysis highlights that 19% of claimants across the capital live in properties with fewer bedrooms than they are entitled to – with this rising to a third of claimants in some areas – meaning that they are legally overcrowded. Boroughs believe this overcrowding is due to the lack of affordable accommodation at an appropriate size.

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