Landlords warn on one year 'LHA cap' exemption

The government announced on Tuesday the ‘Local Housing Allowance (LHA) cap’ on housing benefit will apply to supported housing tenancies which begin after April 2017, instead of April 2016 as originally intended.

General needs tenants from 2016 will be affected, with the cut actually taking effect in April 2018.

Sinéad Butters, chair of Placeshapers which represents 100 housing associations, said while the temporary reprieve had given landlords “breathing space”, the announcement would not give providers enough confidence to pick developments back up.

Bromford warned the exemption would increase the period of uncertainty and raise the likelihood that schemes would be scrapped.

Associations have put development of new schemes on hold as they await clarity on how supported housing will be funded if the cap applies.

It came as the National Housing Federation (NHF) launched a working group to “find a credible preferred model” for funding supported and sheltered housing in the future.

Ms Butters, who is also chief executive of Aspire Housing, said: “This is just breathing space rather than an announcement that means we’re [Placeshapers] going to get on building our supported housing schemes, as I don’t think it will be enough.”

Association Knightstone has put on hold two extra care schemes, “one of which was ready to go, and one that was on the drawing board”.

Nick Horne, chief executive of Knightstone, said: “Clearly this is not something that gives us confidence to start our investment plans up again.”

Philippa Jones, chief executive of 28,000-home Bromford, said the year-long reprieve “could just drag out that period of uncertainty”.

She said the landlord might have to look at scrapping future schemes if the indecision lasted for a year.

Rachael Byrne, director of care and support at 55,000-home Home Group, said while welcome, it was “only a stop-gap”. “We need long-term certainty,” she added.

The NHF began its evidence-gathering from landlords this week ahead of the first meeting on 23 March, which it hopes will influence the government’s decision.

The government will publish a review into funding supported housing this month.

UPDATE: At 2.21pm 03/03/2016

A DWP spokesman said it was delaying the introduction of the LHA cap while a review was carried out because it “values the role supported accommodation plays in helping vulnerable people”.