NHC Spring Budget representation calls for boost to Local Housing Allowance

With Chancellor Jeremy Hunt’s Spring Budget statement coming on the 15th March, the NHC has submitted a budget representation to the Treasury. The NHC has long-term asks on investment in energy efficiency of existing homes, on brownfield land remediation and local authority capacity, which we set out in our 2021 Spending Review Representation. However, at the Spring Budget, we are focusing our representation on the need to uprate Local Housing Allowance (LHA) so that it reflects the real cost of renting in the private sector. We believe that the most pressing priority for the Chancellor is to take urgent action to tackle the cost-of-living crisis by making this policy change.

The NHC and our members believe that a continued freeze on LHA would make it even harder for existing private renters to make ends meet, risking homelessness and making it increasingly difficult for local authorities to discharge their homelessness duties effectively. Therefore, our recommendation is that the Chancellor must re-set the Local Housing Allowance to cover at least the 30th centile of local rents, and then relink the benefit to the real cost of renting for future years.

While Local Housing Allowance has been frozen for the last two years, rents have continued to rise in the North, resulting in a situation where last year’s Northern Housing Monitor found just 7% of rental ads in the North were affordable to those reliant on Local Housing Allowance. This change would primarily benefit private renters who are struggling with the cost of living crisis. It will particularly benefit the 246,000 renters across the North facing unaffordable rents and affordability pressures. Another benefit, as aforementioned, would be to aid local authorities in the discharge of their homelessness duty, enabling them to secure private rented homes rather than using temporary accommodation or bed and breakfast.

The NHC will continue to focus on our influencing objectives of meeting the net zero challenge and putting housing at the heart of a rebalanced country, through engagement with parliamentarians, civil servants and other relevant stakeholders.

Look out for our on-the-day briefing on the 15th March, which will cover all of the details announced in the Chancellor’s statement, and put it into context for the North’s housing sector.