Valuation Office Agency Rent Officers determine Local Housing Allowance (LHA) rates used to calculate Housing Benefit and the Housing element of Universal Credit (UC) for tenants renting from private landlords.
LHA rates are based on private market rents paid by tenants in the broad rental market area. This is the area within which a person might reasonably be expected to live. These can be searched via: https://lha-direct.voa.gov.uk/search.aspx
In April 2020, the LHA rate was increased to the 30th percentile of local market rents for recipients of UC and Housing Benefit. This represented an investment of around £1 billion and provided 1.5 million households with £600 more housing support per year than they would have otherwise received. I welcome that this increase has been maintained in cash terms for 2022/23 and 2023/24.
In both inner and central London, the national cap continues to apply, but this has been increased so that it is based on the Outer London rate plus 20 per cent.
On the benefit cap, although temporary changes were in place during the pandemic, it is not the intention to fundamentally change the process, principles or application of the benefit system. The national cap is currently set at £20,000, rising to £23,000 in London. The Chancellor will exceptionally increase the cap by 10.1 per cent in 2023, in line with inflation.
However, if claimants need extra support to meet rental costs they can approach their Local Authority for a Discretionary Housing Payment (DHP). Since 2011, the Government has provided nearly £1.6 billion in DHP funding to local authorities.
Exemptions from the cap are in place, which protect families who experience a sudden change in their circumstances. If someone loses their job, they may qualify for a grace period from the cap for 39 weeks. Exemptions also apply for the most vulnerable claimants who are entitled to disability benefits and carer benefits.