Housing benefit increase confirmed in Autumn Statement

The Local Housing Allowance will increase by 6.7% next year, Chancellor Jeremy Hunt announced in the Autumn Statement.

Benefits have been frozen since 2020 despite rents rising rapidly in that time.

Hunt said this will bring the LHA to 30% of local market rents, as well as increase household support by an average of £800 next year.

The Chancellor said: “Because rent can constitute more than half the living costs of private renters on the lowest incomes, I’ve listen closely to many colleagues as well as the Institute of Fiscal Studies, the Resolution Foundation, Citizens Advice UK and the Joseph Rowntree Foundation who said that unfreezing the local housing allowance was an urgent priority.”

Kate Steere, deputy editor and housing expert at personal finance comparison site finder.com, said: “Higher interest rates have had a knock-on effect on the rental market, with many landlords having no option but to increase rents to cover their mortgage costs.

“The Chancellor’s decision to increase local housing allowances will bring relief to low-income households.

“In a cost of living crisis, many families have had nowhere to turn and have faced going into rent arrears. This boost will be welcomed by both renters and landlords alike.”

At the same time Hunt announced a crackdown on long-term benefits.

He said that if somebody has not found a job after 18 months of looking, they will need to go on a mandatory work placement “to increase their skills and improve their employability”.

If they don’t engage with this process for six months their benefits will be stopped.