Rishi Sunak released his spending review in November and alongside this, the OBR published their Economic and Fiscal Outlook report. Within this report, it was detailed how local allowance rules will change going forward, which will have an impact on certain benefit claimants.
At the time, these details drew ire from the National Residential Landlords Association (NRLA) who detailed landlords and tenants dependent on state benefits alike will suffer.
The NRLA warned the changes represent a “kick in the teeth ” for both renters and landlords who are dependent on certain benefits such as housing benefit and Universal Credit to cover rents.
Ben Beadle, the Chief Executive of the NRLA, provided the following comments on the changes as the details were revealed: “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.”
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Today, Thérèse Coffey, the Secretary of State for Work and Pensions, was questioned on this by the Work and Pensions Committee.
It was highlighted that in mid-2020, the DWP welcomed LHA increases which were originally set to be permanent.
This permanency was altered by the Government in November and Thérèse was asked if she was overruled on this by the treasury.
Thérèse argued the uplift “in cash terms” has always been permanent in nature and additional work on the rental market is needed.
Stephen Timms, the chair of the committee, pushed Thérèse on this, asking her if she accepted that if LHA rates are frozen, it will create a kind of “postcode lottery” that was prevalent just before the relinking.
Thérèse was defiant in her response: “No I don’t accept that, partly because as I just explained, we’ll need to understand what’s happening in the light of the pandemic.
“[We’ll need to look at] what’s going on with different aspects of rental values.
“Anecdotally, it’s a mixed bag, in some parts of the country rents are coming down.”
In early January, LHA issues arose once again as the UK was placed into another lockdown and in a joint statement, the National Residential Landlords Association, The Big Issue and Ride Out Recession Alliance, Shelter, ARLA Propertymark, the Nationwide Building Society, and StepChange the Debt Charity issued a stark warning to the Government and public: “Many thousands of private renters and landlords across the country now face rent arrears due to the impact of the pandemic.
“Ministers have failed to address the core problem of debts which have built despite the financial package put in place so far.
“Indeed, the Chancellor confirmed that housing benefit will not be linked to the cost of renting for future years.
“Renters, landlords and letting agents cannot be expected simply to muddle through indefinitely where they face these financial difficulties.
“The Government needs to develop an urgent package to help renters in paying off arrears built since March last year.
“Without further action, debts will continue to mount, making it far more difficult to sustain tenancies and keep renters in their homes after the pandemic.”
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