Restoring Local Housing Allowance rates to prevent homelessness

Key findings

• The private rented sector is increasingly becoming an unviable options for resolving homelessness. The first report in this series, Cover the Cost: How gaps in Local Housing Allowance are impacting homelessness, set out the impact of changes to Local Housing Allowance rates, also known as Housing Benefit, on homelessness. A series of cuts to the rates, including a four-year freeze since 2016, has meant far too many people are locked in a struggle to pay rent and still have enough left over to feed their family and pay bills. In the worst cases, this is causing homelessness. It is also leading to increased use of temporary accommodation as councils struggle to prevent and end homelessness due to a lack of affordable housing options.
• Research by Alma Economics, commissioned by Crisis, shows that investing in Local Housing Allowance rates so they cover the cheapest third of private rents (the 30th percentile) will prevent more than 6,000 households from becoming homeless over three years, and lift 32,000 households out of poverty, including 35,000 children.
• This will result in overall benefits of £5.5 billion, from reducing the need for temporary accommodation and homelessness services, as well as reducing the need for services relating to homelessness such as health. Once the cost to the Government (£3.3 billion) of the investment over three years is taken into account, this still leaves benefits of £2.1 billion.
• Restoring Local Housing Allowance rates to cover the cheapest third of rents (the 30th percentile) will have the most immediate impact on current levels of homelessness in Great Britain, and will help thousands of people keep their homes.

Reference

Basran, J. (2019) Cover the Cost: Restoring Local Housing Allowance rates to prevent homelessness. London: Crisis.