Local housing allowance (LHA) is inadequate to cover even the lowest private sector rents in many areas of England, according to a new study. This contradicts government claims that at least 30 per cent of local rents will be affordable with the new rates.

The study, for campaign group Shelter, compares bottom-quartile rents with maximum LHA rates in local authorities in England as at April 2011, when recent changes to LHA were first introduced.

Key points

• The maximum LHA is not enough to cover the cheapest quarter of two-bedroom rents in just over one-third (34 per cent) of local authorities in England, indicating these areas are largely unaffordable for small families claiming LHA.
• In 34 of these 109 local authorities, the shortfall is £50 a month or more.
• Local authority areas that are largely unaffordable for small families are spread across England, with many rural and northern areas affected.
• The biggest three shortfalls are in central London.

From April 2011 the government abolished the five-bedroom LHA rate, and introduced absolute caps on LHA rates for properties with four bedrooms or fewer.

Source: Liam Reynolds, The Affordability of Private Renting for Families Claiming Local Housing Allowance, Shelter
Link: Report