Government must increase Local Housing Allowance

The government must increase Local Housing Allowance to avoid pushing Londoners into poverty or homelessness, London Labour Assembly Member Sem Moema has demanded.

Currently around 125,000 households across London have been pushed into precarious living arrangements because their housing entitlements fall short of their rent, according to London Councils.

Local Housing Allowance (LHA) rates have been frozen by the government since April 2020. Families on low incomes can access support based on the thirtieth percentile of housing costs in September 2019 – meaning that a third of private rentals should have been affordable at that time.

Rents in the capital have increased by 20% since then, meaning those on low incomes must plug the gap themselves at a time when the rising cost of living is forcing many to go without basic essentials.

In inner south-east London, for example, renters can face a shortfall of £125 each month, according to IFS data. For a two-bedroom home, the thirtieth percentile of rents would cost a family £1,475 a month but the LHA rate is £1,350.

The freeze means that only 2.3% of properties available for private rent in London are affordable under LHA rates. Low-income families are forced to use limited financial resources to make up large shortfalls in housing support as a result – increasing their risk of poverty or homelessness.

Assembly Member Moema has written to the Secretary of State for Work and Pensions to demand the uplift, and echoed the demand at today’s National Housing Summit, where she outlined that Londoners face significant housing stress.

Her demand is made at a time when there is already a crisis in homelessness in London, with record number of households living in temporary accommodation which is costing London boroughs £60m per month. Rough sleeping has also increased by 21% over the past year.

Labour London Assembly Member and spokeperson for housing, Sem Moema AM said:

“Unaffordable housing is one of the biggest crises facing Londoners.

“The meagre rate of housing support payments is causing real financial problems for families across our city – and is creating an arbitrary difference between the support that different families can get depending on a postcode lottery.

“The government need to realign local housing allowance to the rents Londoners actually have to pay – giving families welcome relief and reducing the housing crisis in our city.”