LHA must be increased if landlords are to support the sector

?Millions of tenants are asking for extra help with housing costs as landlords are being forced to pass on the increases in their mortgages due to rising interest rates.

The average British tenant is now spending more than 28 per cent of their earnings on rent, marking the highest level in a decade, according to recent figures. According to Zoopla, rents have been soaring faster than earnings for nearly two years and rental affordability is at its worst for 10 years across seven of the 12 regions in the UK.

The proportion of tenants falling behind with their rental payments has doubled to 8 per cent in the last six months and almost 15 per cent said they are now finding it "very difficult" to pay, up from 10 per cent.

In London, average rental costs could soar to £2,700 per month next year, new figures suggest.

At Caridon Landlord Solutions, we are finding an increase in landlords with tenants in receipt of Housing Benefit or Universal Credit struggling to meet their payments based on current rates.

This problem is being compounded by the fact that LHA rates were frozen from April 2016 for four years. This added to landlords’ concerns about the gap between LHA and market rent levels. Although LHA rates were increased in 2020/21, they’ve subsequently been frozen in cash terms. Inflationary pressures over 2022/23 have led to more calls for a review and uprating.

At Caridon Landlord Solutions, we are seeing the pressure that both landlords and tenants are under, and whilst we work hard to ease the transition from Housing Benefit to Universal Credit, and help landlords work with tenants to implement direct payments, the fact that the monetary value is not enough for many to sustain living where they are is a huge problem.

Whilst we understand that the rate of LHA is not an isolated issue; it forms part of the broader context of the housing crisis, which is complex and multifaceted, adjusting LHA rates to reflect the current economic climate and rising rental prices would be a step in the right direction.

Not only would it help to alleviate poverty and prevent homelessness, it would provide lower-income households with access to better housing options and encourage more private landlords to support this sector.

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