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Local Housing Allowance - General Needs

From April 2019 the Government is making changes to Housing Benefit and Universal Credit payments to people of working age. For tenants receiving Housing Benefit, the changes will affect those who signed a new tenancy agreement (or renewed an existing one) from 1 April 2016. All tenants in receipt of Universal Credit will be affected regardless of when they signed their tenancy agreement.

What is changing?

The amount of Housing Benefit or the housing element of Universal Credit you will receive will be capped to the relevant Local Housing Allowance (LHA) rate for your household.

You can find the LHA rate for your area on the government website.

If you are a single, under 35-years-old, and do not have any dependent children living with you, your eligible rent could be capped to a shared accommodation rate even if you do not share your home with anyone else. The rate for your area can be found by entering your post code into the web link above.

Most single people over 35-years-old, certain under 22-year-olds, and couples with no dependant children will be entitled to the rate for a one bedroom property.

Here are some examples of the current LHA rates in areas where we have homes:

AreaShared1 bed2 bed3 bed4 bed
Blaby£59.00£86.30£109.32£126.58£163.16
Coalville£59.00£86.30£109.32£126.58£163.16
Ilkeston£66.74£90.90£108.26£120.29£151.50
Leicester£59.00£86.30£109.32£126.58£163.16
Long Eaton£66.74£90.90£108.26£120.29£151.50
Northampton£66.32£100.05£103.56£117.70£149.59

Will I be affected?

Some tenants will find that the amount they receive in Housing Benefit or Universal Credit is lower than their rent and service charges. This means they will have to pay the difference.

Will I also have to pay for any spare rooms?

If you are of working age and have one or more extra bedrooms, your rent and any service charges used in the assessment of your Housing Benefit or the housing element of Universal Credit is already capped.

If the difference between your rent and the relevant LHA rate for your household is higher than the reduction for under-occupied bedrooms, only the cap will apply. Similarly, if the reduction for under-occupied bedrooms is higher than the relevant LHA rate for your household, only the reduction for under-occupied bedrooms will apply.

Please note that in all cases, you will only receive one reduction.

What do I need to do now?

If you think you might be affected by the LHA cap, there are things you can do to prepare:

  • Have a look at your budget and see if you would be able to afford paying any shortfall in your rent
  • Pay more rent between now and April 2019 to get your rent account in credit
  • If you are of working age, get a job or increase your hours so you are not dependent on benefits for all of your income

Examples

Here are some examples of the types of people who may or not be affected.

John is 21-years-old. He signed a tenancy agreement in May 2016 for a 1-bed flat. He is single and currently claims Housing Benefit.

If John’s circumstances remain the same, from April 2019 he will not receive his full housing element for a 1-bed flat. He will only receive entitlement for a shared accommodation/room rate. If his rent is £90 a week and a room rate is £70 a week, John will have to pay £20 each week to cover the shortfall.

Alfie is 36-years-old and signed a new tenancy in December 2017. He lives in a one bedroom flat. He is single and claims Universal Credit.

If Alfie's circumstances remain the same, in April 2019 his Universal Credit award will be re-assessed. If the LHA in his area for a 1-bed property is lower than his rent, his Universal Credit award will be reduced, although he will need to ensure that he continues to pay his full monthly rent.

Brian and Brenda are both 65-years-old. They have lived in the village all their lives, but only moved into their bungalow in June 2016. The bungalow is adapted for their needs with level access shower and their daughter lives just down the road to help out whenever they call. Both receive pension credits and Housing Benefit.

Brian and Brenda will not be affected as they are of pension credit age.

If you are unsure if you will be affected, please call 0300 123 6000 and ask to speak to one of our Money Advisors.

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