End to the benefit freeze announced

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Housing Benefit:

The Government has
announced that the freeze on housing benefits, in place since 2015,
will end next year, baring of course any upset to the outlook
following the December general election.

Thousands of private
renters in England claim housing benefit in order to help cover the
cost of their rent. Many of these renters are working, but their
income won’t stretch to afford private rents in their local area.
Private rents have been rising consistently for several years now,
and between 2011 and 2019 they rose in 79% of the country.

Local Housing
Allowance (LHA) rates are calculated for every local area based on
local rents. The maximum amount of support a household can claim will
depend on where they live, the minimum number of bedrooms they need
and their current income.

LHA won’t always
cover the full cost of renting and anyone who claims housing benefit
is expected to find a home to rent which is cheaper than the average
for their local area. Housing benefit levels are set at, or below,
the cost of renting a home in the bottom third of the private rental
market.

Since 2010 housing
benefit levels have not risen in line with rising private rents, and
current freeze means that they will remain frozen at their 2016
levels until 2020, regardless of how much private rents have gone up
by in each local area.

This means that most
private renters on housing benefit will face a monthly shortfall
between the actual cost of their rent, and the support available.
Some locations are far worse than others for tenants in the regard,
the bigger cities such as London and other well-known expensive
postcodes including places such as Milton Keynes, Oxford, Luton,
Warrington and Bristol being the worst.

Meanwhile, the
government plans to give thousands more people a step-up onto the
housing ladder

with a new national
model for shared ownership. Social tenants moving into new homes will
be given the chance to buy a share with just a 10% minimum initial
stake required, cut from 25% for all shared ownership homes.

The plans will allow
people to buy their homes in 1% chunks, rather than 10% at a time
with a package of measures to help people on lower incomes get onto
the housing ladder confirmed by the Housing Secretary Robert Jenrick
(17 October 2019).

This was announced
over the summer, that the government is reviewing a new national
model for shared ownership to make it far easier for people to buy
more of their own home, including allowing them to buy in 1%
increments. In some areas, this will mean people can get on the
housing ladder with deposits as low as £2,000.

This new policy is
designed to help to fulfil the new Prime Minister’s priority to
“level up” the whole country, closing the opportunity gap and
helping millions of young people into home ownership.

Housing Secretary
Robert Jenrick MP said:

“Many people want
to own their home, but can’t see a route towards achieving that
goal. This government is determined to help people realise that
ambition and boost ownership for thousands of hard-working people up
and down the country.

“Owning a home is
not just about the four walls around you, it’s about investing in
your family, saving for the future and putting down roots in a
community.

“These measures
announced… [17 October 2019] will mean more people, including
residents living in new housing association homes, are given the
opportunity to get on to the housing ladder.”

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