Millions of renters to be £800 better off from April
Local Housing Allowance (LHA) rates – the amount people renting from private landlords can claim in housing benefit or universal credit – will rise this year for the first time since April 2020.
The boost, which is worth around £800 a year on average, means anyone renting a home in 30% of the cheapest private rental properties in their area, should have their entire rent covered by benefit payments.
What you can claim towards your rent will depend on house prices in your area and the size of the property you rent.
Rates are different for shared, one bed, two bed, three bed and four-bedroom accommodation.
For example, eligible renters could save:
- £1,850 a month on a four-bedroom property in Bristol
- £850 on a two-bedroom home in Greater Glasgow
- And £675 a month in a one-bedroom property in Leeds
Those living in the most expensive areas, such as London, will see the biggest boost.
The uplift is part of the government’s £104 billion cost of living support package – worth around £3,700 per household. And follows the recent cut in national insurance contributions from 12% to 10%, saving a further £450 a year for an average salaried worker.
What is housing benefit?
Housing benefit was designed to help you pay your rent it you were unemployed, on a low income or claiming benefits. It’s currently being replaced by universal credit.
You can only make a new claim for housing benefit if you’ve reached state pension age or you’re in supported, sheltered or temporary housing.
What housing help can you get with universal credit?
You can get help paying for your housing if you’re eligible for universal credit – called housing payment.
Housing payment can help you pay your:
- Rent to a private landlord
- Rent and service charges if you rent from a housing association or local authority i.e. council housing
- Service charges if you or your partner own the property you live in
You might also be able to get help with:
- Council tax reduction
- Support for Mortgage Interest (SMI) if you own your own home and you’ve been claiming universal credit for three months in a row
If your housing payment doesn’t cover all your rent, you might also be able to get extra help from your local council. Called a discretionary housing payment, you could get help with rent deposits or moving costs.
What are local housing allowance rates?
Local housing allowance (LHA) rates are used to calculate housing benefit for tenants renting from private landlords.
They are decided by the Department for Work and Pensions (DWP) using information provided by the Valuations Office Agency (VOA).
LHA rates are based on private market rents being paid by tenants in a Broad Rental Market Area (BRMA).
These rents are being paid by the people with the same number of bedrooms as the property where you live, or the number of rooms you and your household needs.
VOA rent officers collect rental data from letting agents, landlords, tenants and other sources and then share this information with the DWP on an annual basis.
You can check your current LHA rates on LHA Direct by searching by postcode or local authority area.
You can also check how many bedrooms you might be eligible for based on the number of people in your household.
Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.
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