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The Chartered Institute of Housing is the independent voice for housing and the home of professional standards

It's time for government to Cover the Cost to prevent homelessness


On the day that Crisis launches its Cover the Cost campaign, CIH policy and practice officer Sam Lister explains that thousands of private renters on lower incomes are facing poverty and homelessness because the benefit specifically designed to cover their housing costs is not enough. They live in all parts of the Britain, and among the hardest hit are younger people and families with young children.

This is leading to less private rented housing available for people on benefits, which in turn is forcing councils to make more use of expensive, and often highly unsuitable, temporary accommodation to try to stem a rising tide of homelessness.

At CIH, we believe this is unacceptable – and it certainly isn’t meeting the government’s social and housing policy objectives.

Today the homelessness charity Crisis launched its Cover the Cost campaign, calling on the government to address the shortfall in local housing allowance (LHA) to make private renting affordable again.

LHA rates determine the maximum amount of financial support under universal credit that people receive to assist with paying rent in the private rented sector. But following years of freezes, LHA no longer covers even the very cheapest rents.

According to our research, in two-thirds of Scotland, four-fifths of Wales and an unbelievable 97 per cent of England LHA covers not a third, but barely a fifth, of private rented homes.

Renters face gaps of hundreds, even thousands, of pounds a year – making it increasingly likely that they’ll have to choose between paying for necessities like food and heating or their rent. It’s impossible to budget around sums like these, particularly for households living on subsistence benefits, which aren’t designed to cover rents.

This hits single people aged under 25 particularly hard, because they are only entitled to LHA to cover the rent on a bedroom in a shared home, and the levels of other benefits they may be entitled to are also much lower, so they have less to make up any gap.

Desperately stretched people are having to cut back on essential spending or are getting into debt and rent arrears. This significantly increases the risk of homelessness for many. It also makes it difficult for people who are experiencing homelessness to access a settled home, as social housing is in short supply and the private rental market is unaffordable.

LHA was frozen, again, in 2016 – this time for four years. The freeze has led to a vicious cycle -- it threatens renters with potential eviction as they struggle to pay their rent, and then limits what people can afford when they are looking for accommodation once evicted – leading to more homelessness.

It also means private rented accommodation is less of an option for councils that are struggling to deliver on their housing duties. This has led to increased use of temporary accommodation, on which councils now spend nearly £1 billion a year. I can certainly think of better ways to spend a billion pounds of public money to address the housing challenges faced by our country.

To end homelessness, housing policy must provide people on low incomes with security, decent living conditions and affordable rents. In the long-term, that means building many more of the right homes, in the right places, at the right price – essentially a considerable increase in the supply of homes at the lowest social rents.

However, until social housing can meet demand, people on low incomes must be able to access secure, affordable and decent homes in the private rented sector.

Unfreezing LHA rates will make landlords more willing to let to claimants and increase the supply of private rented homes available, saving councils money and bringing much-needed stability and security to thousands of people.

That’s why we at CIH are standing with Crisis and a host of other organisations to tell the government that it’s time to Cover the Cost.

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