Welsh associations warn hundreds will be unable to pay rent under LHA cap

When contacted by Inside Housing, Merthyr Valleys Homes, Cynon Taf Community Housing, Charter Housing and Newydd Housing Association all said rents are above LHA levels in some of their properties.

From 2019, Universal Credit claimants will only be able to claim the LHA rate to cover their housing costs.

The LHA rate is supposed to reflect the lowest 30% of market rents in an area, but restrictions on its increase and a four-year freeze have seen it drift away from rising rents.

In low-rent areas some social rents are above LHA rates, particularly when service charges are added in, with parts of Wales among the most heavily affected.  

Merthyr Valleys Homes said the shared accommodation rate is just £48 a week and one-bed LHA is £67.76 against its one-bed target rent of £79.

Cynon Taf Community Housing’s average rent for a one-bed flat is just £70 a week but that is still more than both the £48 a week shared accommodation rate and the one-bed LHA rate.

Of its 1,850 properties, between 400 and 450 are more than LHA rates just on rent and some have service charges on top.

Charter Housing, part of Pobl Group, has 4,200 homes across South Wales and estimates the cap will affect more than 500 households.

Newydd Housing Association estimates that 22% of its properties are above LHA rates on rent level alone, rising to 44% when service charges are included.

“There are real questions of inequity and inequality,” said Michelle Reid, chief executive of Cynon Taf Community Housing. “Yet again, it’s the poorest people paying for the poorest policies.”

Merthyr Valleys Homes is currently reviewing its rent policy in response to the cap. Mike Owen, chief executive of the landlord, said: “We may move some rents down to LHA and increase others. This will all be part of a big debate with our tenants over the next nine months.”