The Local Housing Allowance (LHA) Cap

From April 2016 the Housing Benefit and Universal Credit housing costs element in the social housing sector will be capped at LHA rates for new tenancies. This means that if you need to claim either of these and your rent and eligible service charges are higher than the LHA rate for your property size, from April 2019 you may have a shortfall between your Housing Benefit or Universal Credit housing costs element and your rent. You will be required to make up any difference yourself. The LHA cap will be imposed regardless of whether you are working age or of state pension age.

In addition, if you are single and aged under 35, under the LHA cap you will only be entitled to the shared accommodation rate of LHA.

If you are claiming Universal Credit, your housing support will be capped at the LHA rate from April 2019, regardless of when your tenancy commences.

Current LHA rates can be found on the Local Housing Allowance rates page of the local government website.

You can calculate which rate of LHA would apply for your family type on the Directgov LHA bedroom calculator.

LHA and the removal of the spare room subsidy (Bedroom Tax)

Under the LHA cap, your Housing Benefit or Universal Credit housing costs element is calculated in relation to how many rooms you require, not the size of the property you are occupying.

If you are under occupying your property, and the potential reduction in your Housing Benefit or Universal Credit housing costs element due to under occupancy is higher than any potential shortfall as a result of the LHA cap, then the under occupancy reduction will apply. However, if the potential reduction in your Housing Benefit or Universal Credit housing costs element under the LHA cap is higher than any potential reduction for under occupancy, then the LHA cap will apply.

The LHA cap and your responsibilities

This information is correct at time of publication (December 2016) and is provided with the intention of allowing you to make an informed decision in relation to any potential allocation of a property in the future. You should also take the LHA cap into consideration when expressing interest in properties through Homesearch.

In addition to the LHA cap, the government continues to introduce other changes to benefits as part of its ongoing programme of welfare reform. You can find out further information in relation to benefit changes at www.gov.uk.