Landlords have criticised the Chancellor, Rishi Sunak, for cutting the amount tenants relying on benefits will be able to claim to pay their rent.
According to a report by the Office for Budget Responsibility published alongside the Spending Review, the Local Housing Allowance will be frozen in cash terms from next year. This means that the rate will fall below the current level, which is set to cover the lowest 30% of rents in any given area.
The National Residential Landlords Association (NRLA) is warning that the announcement represents a kick in the teeth for both renters and landlords struggling with the consequence of rent arrears through no fault of their own.
The current rate was set in April 2020 to help renters whose incomes had been affected by the pandemic to meet the cost of their rents. A recent analysis by the Joseph Rowntree Foundation suggests that 5% (200,000) households in the private rented sector are in arrears and that 30% of all private rented households are worried about paying their rent in the next three months, compared to 19% just before the pandemic arrived.
Ben Beadle, chief executive at the NRLA, said: “Many renters and landlords are struggling with the consequence of rent arrears through no fault of their own yet the Government is failing to take the action needed to address this. Whilst the Chancellor has spoken about the need to support those who find themselves homeless, it would be much better for all concerned to provide the funds needed to sustain tenancies in the first place.”