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Welsh Government to review social rents ahead of LHA cap
The Welsh Government has brought forward a review of its social housing rent policy as it looks for ways to offset the impact of the Local Housing Allowance (LHA) cap.
From 2019, the UK government plans to limit housing benefit levels at LHA rates, which are supposed to reflect the lowest 30% of market rents in an area.
But social rents can be higher than this benchmark, particularly in areas with low LHA rates such as parts of Wales. The country has 110 LHA rates, with 63.6% of them set below the 30% threshold according to government figures.
This means tenants’ housing allowance will not cover rents when the cap is introduced, with several Welsh sector leaders previously warning hundreds could be unable to pay.
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Welsh social landlords are currently able to charge differing rents across their portfolios within “target rent bands” based on factors including the location, size and quality of homes.
Each is given a “high end” and “low end” figure, but these flexibilities have rarely been used, with councils and housing associations tending to prefer to stick to “mid-point” levels.
“Our policy for social housing rents was due for review in 2019/20 but this has been brought forward for a number of reasons, not just to consider the impact of [LHA],” a spokesperson for the Welsh Government said.
“The rent review will examine the various components of the rent policy, how it is being applied by social landlords, how well it is working and how it could be improved.
“The review will also consider external influences such as the application of Local Housing Allowance to the social sector, the supported accommodation review and potential implications including those for the under-35s and older persons.”
The Welsh Government has established a working group involving housing sector leaders to examine potential ways to manage the impact of the LHA cap, with the group’s next meeting scheduled for the end of August.
Meanwhile, Inside Housing understands that Pobl Group, the largest housing association in Wales, is considering a pilot scheme to utilise flexibilities in the current policy.
Clarissa Corbisiero-Peters, deputy chief executive of Community Housing Cymru, said: “We’re pleased Welsh Government is looking at the rent policy. It has certainly got a part to play to manage the impact of welfare reform.
“Housing associations are independent businesses which don’t have any real influence over their income stream. To help them manage those impacts they need flexibility to help them to invest in building new homes.”
