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Tracking Welfare Reform: The Impact of Housing Benefit (LHA) Reform in London

Policy area: Tracking welfare reforms

Date of publication: 25 June 2013

File type: PDF Opens in a new window PDF, 318kb


This report is concerned with the impact of reforms to housing benefit in the private rented sector (PRS) that came into force between April 2011 and January 2012, known as Local Housing Allowance.

Given the long period over which the reforms were implemented, and the range of temporary protection periods and discretionary payments that have applied, it may be some time before it is possible to gain a full understanding of the impacts. However, indications so far show that:

  • more than two-thirds of the growth in housing benefit receipt in London over the past twoyears has been in the private sector
  • rents are not falling in London despite reforms to Local Housing Allowance (LHA); indeed someboroughs have seen rent rises of more than 20 per cent in the last year
  • LHA numbers in inner London are falling for the first time, but grew in outer London by 9 percent between Jan 2012 and Jan 2013
  • working households account for 90 per cent of the growth in LHA receipt in outer London between Jan 2012 and Jan 2013
  • the biggest decline in LHA receipt has been among 25-34 year-olds; falling by more than 11 per cent in inner London between Jan 2012 and Jan 2013
  • LHA households with dependent children are fastest growing family type in outer London.

London Councils is calling for:

  1. A welfare system that is tailored to London’s higher costs of living; particularly higher rents.
  2. London exemption from below inflation rises of Local Housing Allowance.
  3. A full assessment of the additional financial burdens on local authorities arising from welfare reform.

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