Housing Benefit Freeze Leaves Low-Income Renters Struggling as Rent Soars, Experts Warn

[Social Media]

 

Low-income renters in the UK are expected to face mounting financial challenges due to the government's decision to freeze housing benefits, despite escalating rent prices. Experts are raising concerns over Rachel Reeves's recent budget decision to keep the Local Housing Allowance (LHA) at its current levels until 2026. The decision comes amidst an ongoing housing affordability crisis, exacerbating the difficulties faced by vulnerable renters.

 

The announcement was confirmed by Liz Kendall, the Work and Pensions Secretary, who stated that LHA, which determines the amount of housing benefit for claimants based on local rent rates, will remain unchanged. This freeze extends a trend seen over the past decade, with the Conservative Party having previously frozen LHA for seven of the last twelve years, before briefly increasing rates earlier in 2024.

 

Cara Pacitti, a senior economist at the Resolution Foundation, expressed disappointment over the decision, stating, “We were really disappointed not to have seen an increase in local housing allowance, to support low-income renters with their housing costs.” Pacitti highlighted the rapid rise in rental prices, adding, “LHA was increased to match local rents last year. Since then, we’ve seen 8% rental growth. That’s obviously totally unsustainable and, for a lot of families, that’s going to mean really significant gaps between the housing support they’re given and the private rents they’re trying to pay.”

 

A study by the Joseph Rowntree Foundation reveals that private renters relying on LHA to cover their housing costs will, on average, be £243 worse off annually due to the freeze. This figure could climb to £703 by the end of the current parliamentary term if rent prices continue to rise at current rates. The Office for National Statistics reported that average private rents in the UK have surged by 8.4% between September 2023 and 2024, compounding the financial strain on tenants.

 

Ben Twomey, the chief executive of Generation Rent, noted that the LHA freeze is a critical yet understated aspect of the recent budget. “The LHA freeze was in the [budget] small print,” he said, adding, “But that is going to affect 4.6 million people who receive LHA. That seems to us to be a choice made by the government that denies support to those most in need of it.” Twomey emphasized that the freeze disproportionately impacts families, as “Half of those people receiving LHA have children who depend on them. So it’s really going to cause major problems in terms of driving people into poverty, driving people into homelessness, and increasing rent arrears.”

 

According to Chris Norris, policy director at the National Residential Landlords Association, rising rental costs are influenced by a shortage of rental properties and the financial pressures landlords face, including rising costs and increased regulations. “They’re rising because costs have really gone up over the past couple of years,” he said. Norris also pointed to the chancellor’s decision to increase stamp duty on second homes and buy-to-lets from 3% to 5%, which he argued would further limit the supply of private rental properties. “Simply put, it’s just more expensive to add stock to the marketplace,” Norris stated.

 

Twomey added that a lack of rent regulation has also contributed to the escalating rental prices, stating, “Rents go up because they can. There’s no check on the way rents increase. Collectively, the market rate of rent is basically what every landlord sticks their finger in the air and decides.” He summarized the situation faced by tenants, noting, “Landlord costs go up, landlord costs go down – either way, tenants’ costs go up.”

 

In addition to freezing LHA, the budget introduced increased funding for housing projects, including £500 million to support affordable housing initiatives. Pacitti recognized this investment as crucial, commenting, “We heard them announce funding for affordable housing, increasing the social housing stock, which is really important for a lot of low-income families who are renting privately when in previous generations they would be in social housing.”

 

A government spokesperson defended the budget’s approach to housing and social support, stating, “We are committed to the biggest increase in affordable housing in a generation, and to ensuring our social security system is fair and sustainable.” They also highlighted recent increases in LHA, noting, “Local Housing Allowance rates were increased earlier this year, worth an additional £800 on average to low-income households, and we have announced £1bn to support low-income families through the Household Support Fund and Discretionary Housing Payments.”

 

While some welcome these measures, the LHA freeze continues to be a point of contention for experts and advocacy groups who argue that without additional support, low-income renters will continue to face an uphill battle in meeting basic housing needs. As rent prices show no sign of stabilizing, the impact of the freeze is expected to weigh heavily on the most vulnerable segments of society.

 

Based on a report by the Guardian 2024-11-05

 

 

 

[john donson]

I wonder how thai people cope, with no handout

 

the moo baan I lived for 15 years, saw rent increases from 25.000 baht just after covid, to 40.000 baht now, for exactly the same old houses

[JonnyF]

After freezing pensioners they've now gone after low income renters. 

 

Labour, the compassionate party looking after the needy 😄. I guess Starmer doesn't need to worry as he gets 18 million pound houses to live in rent free from his mate Lord Ali. Plus the free clothes, concert tickets etc. He's really making hay while the sun shines.

 

I wonder who is next on Labour's hitlist? Perhaps the disabled?

[Chomper Higgot]

Redirecting money from supporting rents to building affordable homes makes sense.

 

Far too much tax payer’s money is being piped through to the pockets of buy to let landlords.

 

Time to build the affordable homes the nation needs and stop funding private profits from public need.

 

 

 

[black tabby12345]

Does none of the major political powers  in USA take the homeless issue serious enough?

 

 

[JonnyF]

3 hours ago, Chomper Higgot said:

Redirecting money from supporting rents to building affordable homes makes sense.

 

You think these people who cannot afford to pay rent can afford to buy homes?

 

House prices are astronomical in the UK. Largely due to a massive supply and demand issue caused by the influx of huge numbers of immigrants. 

 

What they are doing is removing much needed assistance for low income indigenous people and handing it out to (often illegal) immigrants. 

 

Once again, betraying the British people, especially poor ones. 

 

 

[James105]

3 hours ago, JonnyF said:

After freezing pensioners they've now gone after low income renters. 

 

Labour, the compassionate party looking after the needy 😄. I guess Starmer doesn't need to worry as he gets 18 million pound houses to live in rent free from his mate Lord Ali. Plus the free clothes, concert tickets etc. He's really making hay while the sun shines.

 

I wonder who is next on Labour's hitlist? Perhaps the disabled?

 

Students apparently.  They are putting up the University fees.  This one makes me chuckle though as I can almost feel the anger from the blue haired Hamas supporting leftists all the way over here after they discover their pointless gender/media studies course will be more expensive. 

[roo860]

23 minutes ago, black tabby12345 said:

Does none of the major political powers  in USA take the homeless issue serious enough?

 

 

This is about the UK, not the good old US of A.

[JonnyF]

2 minutes ago, James105 said:

 

Students apparently.  They are putting up the University fees.  This one makes me chuckle though as I can almost feel the anger from the blue haired Hamas supporting leftists all the way over here after they discover their pointless gender/media studies course will be more expensive. 

 

I would have thought they had done enough damage to students by removing the VAT exemption on independent schools, which will disrupt many children's education and put further strain on state funded schools as parents move their children to state schools since they can no longer afford to pay for their schooling.

 

They don't think anything through. Totally incompetent. 

 

[James105]

3 minutes ago, JonnyF said:

 

I would have thought they had done enough damage to students by removing the VAT exemption on independent schools, which will disrupt many children's education and put further strain on state funded schools as parents move their children to state schools since they can no longer afford to pay for their schooling.

 

They don't think anything through. Totally incompetent. 

 

 

That was a policy born out of jealousy though and has no impact on government tax receipts and could well end up costing money.  The university fees though, it took the Lib dems many, many years to recover from saying things like "we will abolish tuition fees" only to increase them when in coalition government.   Labour have been speaking the same language over the years about tuition fee abolishment and they will have some very annoyed students now they are putting them up.  They should probably count themselves lucky that even though Universities sell education in much the same way as private schools do that they were not also inflicted with the 20% VAT increase instead of the 3.1% increase that is being implemented, so they are still benefitting a bit from the 2 tier nature of this government.   

[Chomper Higgot]

19 minutes ago, JonnyF said:

 

You think these people who cannot afford to pay rent can afford to buy homes?

 

House prices are astronomical in the UK. Largely due to a massive supply and demand issue caused by the influx of huge numbers of immigrants. 

 

What they are doing is removing much needed assistance for low income indigenous people and handing it out to (often illegal) immigrants. 

 

Once again, betraying the British people, especially poor ones. 

 

 

Who said people in low incomes are going to buy homes?

 

I see you are back to blaming immigrants.

 

Schrödinger's Immigrants, who are one and the same time living on benefits and buying up all the expensive housing.

 

 

[Chomper Higgot]

16 minutes ago, JonnyF said:

 

I would have thought they had done enough damage to students by removing the VAT exemption on independent schools, which will disrupt many children's education and put further strain on state funded schools as parents move their children to state schools since they can no longer afford to pay for their schooling.

 

They don't think anything through. Totally incompetent. 

 

Oh dear, people buying privilege have to pay VAT on it.

 

[Chomper Higgot]

8 minutes ago, James105 said:

 

That was a policy born out of jealousy though and has no impact on government tax receipts and could well end up costing money.  The university fees though, it took the Lib dems many, many years to recover from saying things like "we will abolish tuition fees" only to increase them when in coalition government.   Labour have been speaking the same language over the years about tuition fee abolishment and they will have some very annoyed students now they are putting them up.  They should probably count themselves lucky that even though Universities sell education in much the same way as private schools do that they were not also inflicted with the 20% VAT increase instead of the 3.1% increase that is being implemented, so they are still benefitting a bit from the 2 tier nature of this government.   

Nice false equivalence between public universities and private schools.

[Seppius]

Well, Starmer will be happy, at least one person on AN still supporting and defending him 🤣

[black tabby12345]

52 minutes ago, roo860 said:

This is about the UK, not the good old US of A.

 

Then again I ask the same question.

Major parties in UK, take homeless issues serious enough?

While doesn't seem to be in US.

 

how many homeless in uk - Google Search

 

[JonnyF]

1 hour ago, Chomper Higgot said:

Schrödinger's Immigrants, who are one and the same time living on benefits and buying up all the expensive housing.

 

Well they have to live somewhere. More demand, less supply = higher prices.

 

But don't worry, Labour have also reduced the threshold for stamp duty for first time buyers by 150,000 pounds, making it even more difficult for them to get on the ladder. 

[JonnyF]

1 hour ago, Chomper Higgot said:

Oh dear, people buying privilege have to pay VAT on it.

 

 

The politics of resentment and jealousy.

 

Not everyone wishing to opt out of the woeful and often dangerous comprehensive school system is rich. Many parents sacrifice a lot to provide this for their children. Now, the state will have to pay for their children's education, assuming there is a school space available for them in the area they live.

 

A ridiculous policy.  

[JonnyF]

46 minutes ago, Seppius said:

Well, Starmer will be happy, at least one person on AN still supporting and defending him 🤣

 

"Pretending" to support him.

 

Certain types just love an argument. 

[Chomper Higgot]

6 minutes ago, JonnyF said:

 

The politics of resentment and jealousy.

 

Not everyone wishing to opt out of the woeful and often dangerous comprehensive school system is rich. Many parents sacrifice a lot to provide this for their children. Now, the state will have to pay for their children's education, assuming there is a school space available for them in the area they live.

 

A ridiculous policy.  

‘Woeful and dangerous’?

 

If your claim is correct then it is the business of Government to improve those comprehensives, and if so why didn’t the last Government fix the alleged ‘woeful and dangerous comprehensives’?

 

In the meantime Labour’s October budget allocates £Billions more funds to schools and education for the children who’s parents can’t afford to buy privilege.

 

https://educationhub.blog.gov.uk/2024/10/31/budget-2024-education-send-childcare-private-schools-vat/

 

 

[JonnyF]

2 minutes ago, Chomper Higgot said:

In the meantime Labour’s October budget allocates £Billions more funds to schools and education for the children who’s parents can’t afford to buy privilege.

 

You seem to hate people who are able to "buy privilige". You sound very bitter and jealous. 

 

Why shouldn't they "buy privilige" in the form of a decent education for their children, using money that has already been taxed from their income?

 

Any money Labour collect from this policy will be lost by the kids who leave the independent schools and return to state schools. It will probably end up costing them money to implement their nasty little scheme.

 

It's the politics of an angry sixth form Sociology student. Perhaps that's why you are such a fan?

[Chomper Higgot]

5 minutes ago, JonnyF said:

 

You seem to hate people who are able to "buy privilige". You sound very bitter and jealous. 

 

Why shouldn't they "buy privilige" in the form of a decent education for their children, using money that has already been taxed from their income?

 

Any money Labour collect from this policy will be lost by the kids who leave the independent schools and return to state schools. It will probably end up costing them money to implement their nasty little scheme.

 

It's the politics of an angry sixth form Sociology student. Perhaps that's why you are such a fan?

I don’t support the idea of ‘buying privilege’ while I have expressed no views on the people who do so. 
 

People pay taxes for all manner of goods and services they pay for out of money they earned and that was already taxed.

Do you have the math on the costs you refer to?

 

[JonnyF]

2 minutes ago, Chomper Higgot said:

I don’t support the idea of ‘buying privilege’ while I have expressed no views on the people who do so. 

 

Sounds like a communist perspective. People buy privilige all the time. Like flying first class or sitting in the executive box at Arsenal (although in fairness Keir doesn't pay for that - he grifts it). 

 

2 minutes ago, Chomper Higgot said:

People pay taxes for all manner of goods and services they pay for out of money they earned and that was already taxed.

 

Essentials like education and healthcare should be exempt, not only for reasons of moral decency (which Labour lack) but since it reduces the burden on the state (which Labour appears unable to see). 

 

2 minutes ago, Chomper Higgot said:

Do you have the math on the costs you refer to?

 

 

Yes.

 

https://www.taxpayersalliance.com/analysis_vat_on_private_schools_could_end_up_costing_taxpayers

 

 

[Chomper Higgot]

1 minute ago, JonnyF said:

 

Sounds like a communist perspective. People buy privilige all the time. Like flying first class or sitting in the executive box at Arsenal (although in fairness Keir doesn't pay for that - he grifts it). 

 

 

Essentials like education and healthcare should be exempt, not only for reasons of moral decency (which Labour lack) but since it reduces the burden on the state (which Labour appears unable to see). 

 

 

Yes.

 

https://www.taxpayersalliance.com/analysis_vat_on_private_schools_could_end_up_costing_taxpayers

 

 

Oh a survey of people who don’t want to pay higher taxes for the privileges they are buying.

 

We’ll soon find out the truth of it.

[JonnyF]

Just now, Chomper Higgot said:

Oh a survey of people who don’t want to pay higher taxes for the privileges they are buying.

 

We’ll soon find out the truth of it.

 

If you don't want the figures, you shouldn't ask for them.

 

Yes we will see, when independent schools start closing down resulting in the whole body of students entering the state system to be paid for by the government, and a loss of tax on the profits the school once made.

 

They will tax the life out of the economy. Like they always do. Despite the liar Reeves saying there was no need to do so in the election campaign. 

 

 

[shackleton]

I retired in Thailand as I could see the UK 

Is now a third rate country 🤔 

Everytime I read the news its mostly negative and depressing 

Best move I made coming to Thailand 🇹🇭 

[Chomper Higgot]

Just now, JonnyF said:

 

If you don't want the figures, you shouldn't ask for them.

 

Yes we will see, when independent schools start closing down resulting in the whole body of students entering the state system to be paid for by the government, and a loss of tax on the profits the school once made.

 

They will tax the life out of the economy. Like they always do. Despite the liar Reeves saying there was no need to do so in the election campaign. 

 

 

Here’s the problem with your claim and your figures:

 

First your categorical claim:

 

29 minutes ago, JonnyF said:

Any money Labour collect from this policy will be lost by the kids who leave the independent schools and return to state schools.

Now from your speculative evidence:

 

 “ANALYSIS: VAT on private schools could end up costing taxpayers”

 

 

[Bkk Brian]

42 minutes ago, Chomper Higgot said:

‘Woeful and dangerous’?

 

If your claim is correct then it is the business of Government to improve those comprehensives, and if so why didn’t the last Government fix the alleged ‘woeful and dangerous comprehensives’?

 

In the meantime Labour’s October budget allocates £Billions more funds to schools and education for the children who’s parents can’t afford to buy privilege.

 

https://educationhub.blog.gov.uk/2024/10/31/budget-2024-education-send-childcare-private-schools-vat/

 

 

If the government is not providing adequate education then buying privilege's is a human right.

 

“Special-needs provisions, specialist education, small faith and girls’ schools have been put at unnecessary risk, and we feel the government’s got a responsibility for all children, including those.”

 

Human rights lawyer Lord Pannick KC, of Blackstone Chambers, will take on the case, which claims Labour’s plans breach the European convention on human rights and the Human Rights Act 1998.

https://www.lbc.co.uk/news/independent-schools-vote-to-sue-over-labours-vat-hike/

[mokwit]

2 minutes ago, JonnyF said:

You seem to hate people who are able to "buy privilige".

The Socialists want to bring us down to their level, rather than strive to achieve.

[Nick Carter icp]

11 hours ago, Social Media said:

“Rents go up because they can. There’s no check on the way rents increase. Collectively, the market rate of rent is basically what every landlord sticks their finger in the air and decides.”

 

   Rental prices are decided by market rates , its what tenants are willing to pay .

   If a landlord puts his property on the market for more than market rates, then he wont get any tenants 

[Nick Carter icp]

6 hours ago, Chomper Higgot said:

 

Time to build the affordable homes the nation needs and stop funding private profits from public need.

 

 

   Have Labour announced that they will be building these new homes ?