AN ESTIMATED 21,000 social tenants across Scotland aged under 35 could potentially be adversely affected by UK Government plans to cap housing benefit for social housing tenants from April 2019, collectively facing a rent affordability gap of up to £22.6 million annually. This is a key conclusion of an interim report on the impact of the Local Housing Allowance (LHA) cap on young people in Scotland, commissioned by the Scottish Government in conjunction with the Chartered Institute of Housing in Scotland and submitted this week to the Scottish Parliament Public Petitions Committee. A final report exploring the potential to mitigate against the impact of LHA restrictions is due to be completed this summer.
Since October 2015, the UK Government has made various proposals and amendments to cap Housing Benefit or the housing element of Universal Credit for social housing tenants at LHA rates, including for those living in supported or temporary accommodation. The proposals are intended to bring payments for social housing tenants in line with those living in the private rented sector. Legislation to implement these proposals has yet to be introduced. However, as the proposals currently stand, single people under 35 years of age will see their allowance capped at the Shared Accommodation Rate (SAR). Comparing DWP claimant data on average awards received by young Housing Benefit claimants with the Shared Accommodation Rate produces an annual estimated rent gap across Scotland of £22.8m. This takes into account mainstream tenants and those living in temporary or supported accommodation. While some tenants living in specialist accommodation may be protected from the cap, it is not yet clear what exemptions will be made or how much funding will be available to plug this gap.
Housing association rents are typically higher than local authorities’ and so will be affected more by the proposed LHA cap.