Shelter warns of LHA system causing poverty traps

Housing Benefit

The charity Shelter has warned that the new system for determining the quantum of housing benefits paid to applicants will mean that some claimants will be unable to afford private sector rent.
Local Housing Allowance (LHA) is assessed according to location and size of the household, using the average rent in a given area known as Broad Rental Market Area. Shelter believes that these Areas are too large, as there are often vast differences in the rent being paid across the area.
It has said that the LHA will not always be sufficient to cover households’ housing costs, so will require them to meet the shortfall themselves. The charity is concerned that this will encourage people to move to poorer areas, creating poverty traps on the outskirts of town where housing is cheap but there are few jobs.

Shelter, 5th January 2009