Local Housing Allowance

Communities and Local Government written question – answered on 30th March 2010.

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Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

To ask the Secretary of State for Communities and Local Government what estimate he has made of the (a) percentage and (b) cash change in level of local housing allowance in each area for (i) a bedsit, (ii) a one-bedroom property, (iii) a two-bedroom property, (iv) a three-bedroom property and (v) a four-bedroom property when the highest rents are excluded from the calculation.

Photo of Helen Goodman Helen Goodman Parliamentary Under-Secretary (Department for Work and Pensions)

I have been asked to reply.

The Local Housing Allowance was rolled out from 7 April 2008 and is a more transparent way of calculating the rent element of housing benefit for people living in the deregulated private rented sector who make a new claim for housing benefit or for existing customers who change address.

Local housing allowance rates are set monthly by the Valuation Office Agency in England, Rent Officers Wales and Rent Service Scotland. They are published monthly by each local authority and at:

https://lha-direct.voa.gov.uk/secure/default.aspx

In Budget 2010 the Government announced that the top 1 per cent. of rents nationally would be removed from the market evidence for all bedroom sizes one to five in the calculation of local housing allowance rates, except the shared room rate. This will take effect for new claims from October 2011 and existing customers will be affected when their benefit rate is reviewed, usually at the anniversary point of their claim.

The estimates the Department for Work and Pensions have made on the impact of this measure on local housing allowance rates are based on the latest available list of rents from the Valuation Office Agency which relate to April 2009. Due to substantial changes to broad rental market area boundaries and local housing allowance rates since April 2009, and potential for further changes in the near future, it is not appropriate to break these figures down to identify impacts on specific areas.

According to our estimates, had the policy been introduced in April 2009, the number of customers who would see a decrease in their local housing allowance rate under this measure is around 2 per cent. of the local housing allowance caseload. The average loss for these customers is £24 (at April 2009 prices) although there is large variation on this from area to area and customer to customer. A few customers, such as those in five-bedroom houses in Central London, could see their awards decrease by significant amounts, while others would see their benefit change marginally.

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