- New Local Housing Allowance rates to come into force in April as legislation being laid in parliament.
- £7 billion investment over the next five years means 1.6 million private renters on Universal Credit or Housing Benefit will be around £800 better off a year.
- Comes as national insurance cut comes into effect – meaning households with two average earners will save nearly £1,000 per year.
The boost will benefit some of the poorest families on either Universal Credit or Housing Benefit who will gain around £800 a year on average.
The support worth over £7 billion over the next five years comes as the government publishes the proposed LHA rates for 2024/25, with people living in the most expensive areas set to see the biggest boost.
The increase to the LHA has been welcomed by many housing and homelessness organisations and is part of the Government’s £104 billion cost of living support package – worth an average £3,700 per household. This also includes raising benefits by 6.7%, the state pension by 8.5%, and £300 cost of living payments, with over 7 million households receiving the latest payment and another payment coming in Spring. Whilst more than 26 million payments totalling over £2 billion to help families with essentials have been made since October 2021 through the Household Support Fund.
This additional support comes as 27 million people are set to get a significant tax cut as the main rate of employee National Insurance will be cut from 12% to 10%. This reduces National Insurance by more than 15% in total, saving £450 this year for the average salaried worker on £35,400.
Subject to the benefits cap, eligible renters of:
- A four-bedroom property in Bristol could get up to £1,850 per month.
- A two-bedroom property in Greater Glasgow could get up to £850 per month.
- A one-bedroom property in Leeds could get up to £675 per month.
Work and Pensions Secretary Mel Stride said:
Housing costs are the number one expense for families. This £1.2 billion boost to Local Housing Allowance, along with our landmark Back to Work reforms, reflects our fair approach to welfare – helping people into employment while protecting the most vulnerable with unprecedented cost of living support.
Minister for Disabled People, Health and Work Mims Davies said:
Keeping inflation down and supporting people to stay and progress in work is the best way we can bolster families’ finances and help them progress, but we know some are still struggling which is why we are providing this important extra help.
This key boost to our housing support will see average renters around £800 better off. It is just one crucial part of our £104 billion package to help the most vulnerable which also includes an increase to benefits in line with inflation and our latest series of cost of living payments.
Crisis Chief Executive, Matt Downie said:
It cannot be understated just how vital this investment in housing benefit will be in helping to both prevent and end homelessness.
In recent years, people receiving housing benefit have found it increasingly difficult to afford the soaring cost of rents. Giving housing benefit this crucial boost will make a real difference to people across Great Britain and will relieve some of the pressure facing people on the lowest incomes.
We hope this investment will be maintained for the long term, so we can continue with our collective mission to end homelessness for good.
The investment comes on top of the £30 billion the government is providing over 2023/24 on housing support.
Minister for Levelling Up Jacob Young said:
This funding boost is just one part of how we’re supporting people in the private rented sector with the cost of living.
We have already invested £30 billion in housing support, along with Discretionary Housing Payments which provide an added safety net for anyone struggling to meet their rent.
We are taking the long term decisions needed for a better private rented sector, through our Renters Reform Bill, giving tenants security and supporting good landlords.
The government is also tackling homelessness with the £654 million Homeless Prevention Grant, giving councils in England vital money and support to prevent and tackle homelessness, as well as developing the Homelessness Covenant with Crisis.
The Local Housing Allowance determines the maximum housing support for private renters. It ensures that claimants in the same area with similar situations are entitled to the same maximum support regardless of the rent they pay. The level of support is based on the area where the person lives and the size of their household.
Additional Information
More information on cost of living payments – Cost of Living Payments 2023 to 2024 – GOV.UK (www.gov.uk)
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