Capping of social housing rents - what impact will it have on your service?

Tuesday, 26 January 2016 - 8:48am

The proposed capping of social housing rents at Local Housing Allowance levels could have a devastating impact on homelessness services. Help us make the case to Government about the effect it could have on the support you provide.

In last November's Comprehensive Spending Review the Government outlined their plans to extend Local Housing Allowance (LHA) to social landlords.

We know this will have a major impact on the homelessness sector so we need to start collecting evidence to help convince the Government to rethink their plans. To make sure we can make the strongest case, can you please help us understand the shortfall these changes will cause in your service?

At present, as you know, social housing providers are excluded from LHA, which is set at the 30th percentile on a list of rents in a locality. LHA is intended to cover any costs associated with renting a property, such as core rent and eligible service charges.

The new rules will apply to affected individuals who sign their tenancy from April 2016 onwards, although the LHA rate of Housing Benefit entitlement will not apply until 2018.

Will this affect your organisation?

From what we understand, supported housing will be covered by the new rules. This has understandably caused alarm among our members. The potential impact of this change could lead to services becoming financially unviable due to the extent of the shortfall this would create between the costs of running your services the amount eligible under LHA.

We have prioritised this issue and, since the announcements, we have been working with the Government to seek clarity and understand how the projected impact will be mitigated. While the Government has said they are committed to protecting supported housing, the mechanism for how that will happen is not yet known. We are not confident that additional Discretionary Housing Payments (DHP) will be sufficient to cover the gap in revenue this would create.

Help us gather evidence

On our website we have produced this simple spreadsheet, to download and complete with basic rental information. All of this will be kept anonymous, but when combined with information from other organisations it will give us a powerful snapshot of the impact the changes will have on the sector.

Please return the completed spreadsheet to so we can collate this information. We would also be grateful for any other information you are able to share at this stage about what you think the impact of the change will be on your services.

We have also published a new section here on our website where we'll keep you up to date on this important issue. We'll also use it to publish resources and suggest steps you may wish to take with your organisation to raise the issue among your local politicians and supporters. Within the next few days we will publish some plain English briefings to help you help others understand why this is an issue.

These latest proposals are unexpected and potentially extremely damaging for services for people experiencing homelessness. It’s vital we collect the strongest evidence, so thank you for sharing this with us.

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Rick Henderson

Rick Henderson

Chief executive

Rick is the CEO of Homeless Link and was appointed to that role in July 2012. He is a member of the government’s National Rough Sleeping Advisory Panel and the London Mayor’s Rough Sleeping Task Group. 

Twitter: @rickviews