Benefit claimants who rent will be £800 better off under new DWP rates

A rise in Local Housing Allowance (LHA) in April will make millions of benefit claimants better off by an average of £800. The Department for Work and Pensions (DWP) has announced that over the next five years he will invest £7 billion in the housing benefit rates he proposes for 2024-2025, and that people living in the most expensive areas will receive the maximum He says he expects it to rise. Local housing benefit rates are used to calculate housing benefit payments for tenants renting from Universal Credit and private landlords. The amount of support varies depending on where you live and the number of people in your household. Local Housing Benefit rates have been frozen since April 2020, but will be reset in April this year to cover 30% of the cheapest rent in the area. This means rents must be affordable for people claiming Universal Credit or Housing Benefit. The DWP says the scheme will affect around 1.6 million private renters on Universal Credit and Housing Benefit, making them £800 a year better off. Plans to increase local housing benefit were confirmed in the Chancellor's Autumn Statement last November. Over the last two years, private rental costs have skyrocketed and according to recent data from the Office of National Statistics (ONS) renting costs from private landlords are rising at the fastest rate since records began in 2006. In the year to November 2023, on average rental costs rose by 6.2%. A breakdown of the data showed renters in Wales had seen the sharpest increase of 7.3%, followed by Scotland at 6.2%, and then England at 6.1%. Due to the Local Housing Allowance freeze, people claiming housing support were being completely priced out of the market as their housing support was not enough to cover even the cheapest rents in some areas of the country. At the time of the announcement, housing charity Shelter said it would “provide a huge sigh of relief for the 1.6 million private renters in England relying on Housing Benefit to help pay their rent”. Work and Pensions Secretary Mel Stride said: “Housing costs are the number one expense for families. This £7 billion boost to Local Housing Allowance over the next five years, 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.” Crisis chief executive Matt Downie commented: “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.”