A very warm welcome to this one-off inquiry looking at the Local Housing Allowance and other benefit-related matters in the housing sector. It is an absolute pleasure to welcome our first panel: Ben Beadle, Alistair Smyth and Councillor Adam Hug. Would you like to introduce yourselves and the organisations that you represent?

Good morning all. Ben Beadle, chief executive of the National Residential Landlords Association. We are a membership body representing about 112,000 members with over 1 million homes.

Good morning. I am Alistair Smyth, director of policy and research at the National Housing Federation. We are the trade body for housing associations in England with over 500 members who collectively own and manage around 2.7 million homes, housing 6 million people.

I am Councillor Adam Hug. I am chair of the Local Government Association’s Local Infrastructure and Net Zero Board, which for these purposes means I am its housing spokesperson. I am also the leader of Westminster City Council.

Thank you so much for joining us this morning. I will kick off the questions. Would you like to comment on the cumulative impact on benefit claimants of the freezing of Local Housing Allowance rates for several years when rents have been rising? What has been the impact on tenants who rely on housing benefit and the health element of UC?

I think it is having a very damaging effect. We know that rents are rising—rents have risen 7.4% in the 12 months to April—and that LHA rates are frozen. I know there was a concession last year, but we need to make a political choice on the number of people who are really struggling at the margins. I want to address the rent increases because I would not want you to form the impression that this is landlords jacking up rents where they can. My members are struggling with their costs as well, whether that is inflation or mortgage interest and not being able to offset that against their tax returns, the cost of regulations, selective licensing, possible minimum energy efficiency standards. All of that is having a huge impact on sentiment in the sector. We have a dozen tenants chasing every available home, and it is the real lack of supply that is driving rents up. I mentioned the political decision. If we had a commitment to setting LHA at the 30th percentile and unfreezing it for the remainder of this Parliament, it would lift 75,000 children out of poverty by 2029-30 at a cost of £1.8 billion. If you were feeling very generous and raised it to the 50th percentile, that would lift 130,000 children out of poverty by 2029-30 at a cost of £3.1 billion. This is all achievable; it just requires deep pockets and the political will to do it.

At the moment, I think only about 2.5% of homes across England are within the LHA rates as they currently stand. That is properties that are listed on the market. In London, recent Crisis figures suggest that is as low as 1.6%. It is a little better in Scotland, but it is also possibly even worse than London in Wales. There are some real challenges about supply that fit within the current LHA rates. First things first, we want to keep people in their homes, for their stability and wellbeing but also because it costs the system overall much more if they do not. The reality is that local authorities face an enormous temporary accommodation crisis because people are not able to sustain themselves in their rented accommodation. They are presenting to councils. The pathway then means going into very expensive emergency interim accommodation in hotels and bed and breakfasts, the costs of which are skyrocketing and local authorities are competing with each other and the Home Office, and there are various other pressures on those, which is incredibly expensive. Ultimately, once they get out of that, they are placed in temporary accommodation, usually in the private rented sector where the LHA rates have not just been frozen in recent years but are capped at 2011 levels. The level of rental increase we have seen since then is huge, meaning that there is an enormous gap for which local authorities are having to foot the bill. To 2022-23, the size of that gap over the previous five years was £740 million, but in reality the proportion will have jumped dramatically over the last two years as we have seen the temporary accommodation crisis skyrocket after the pandemic. My own authority spent £66 million net last year on the gap between what we pay out and what we receive from the Government in temporary accommodation, and there are some worse cases here in London. In London alone, £4 million a day is being spent on that gap by local authorities. We want to keep people in homes, which is why we support unfreezing LHA for people at the front end, but we must bring that into closer alignment by moving away from 2011 levels because the gap is just being picked up by local government, and it is so inefficient. Ultimately, we are placing people in hotels, and even then we are only able to claim for one room when we are having to place people in multiple rooms in those hotels. It is pushing stuff around the sector and it is hurting the lives of the tenants.

For us in social housing there is less of a direct relationship with LHA. The average social rent is about £5,000 a year cheaper in any case than the average rent in the private rented sector—that is an aggregated figure. There is a direct impact where, in some instances in higher-value parts of the country, the LHA rate will be used as a proxy by local authorities to set the maximum amount that they rent. Usually an “Affordable rent”, with a capital “A”, is charged, and LHA therefore becomes an effective cap, which can affect the viability of schemes in the high-value areas. There are multiple reasons why that is a problem, and LHA is just one of those. That is the direct relationship. On the indirect relationship, my colleagues on the panel have already talked about the challenge of the lack of affordability when it comes to applying the LHA rate as it stands, and about how the sporadic way in which it has been uprated over the last decade bears no relationship to the cost of housing. One of the things that we want to point out is that we strongly welcome the Government’s commitment to publishing a strategy on homelessness later this year. We think that is a very important step. We do not yet know what will be in that homelessness strategy. However, we anticipate that it will include things such as reducing homelessness, reducing the number of people living in temporary accommodation, and reducing the number of children living in temporary accommodation. If the LHA rate remains as it is, is not uprated and, in the medium term, is not looked at in the round, we think there would be a risk that some of the ambitions in the homelessness strategy would be harder to achieve. If you are in the private rented sector and you lose your home and end up in temporary accommodation, the lack of affordability in moving from temporary accommodation to the PRS—because LHA applies to the PRS, it does not apply in temporary accommodation even where a household is working—there is no pathway from temporary accommodation into the private rented sector. We know there are not enough social rented homes available by a long stretch, so it will slow down the progress that can be made in reducing and preventing homelessness.

I want to ask about the increasing numbers of HMOs in some areas, and how that could be linked to the freezing of LHA. We are seeing it in Bristol, but I remember from my time in Lewisham where you would get landlords converting a house into one-bed flats in a cheaper part of London but were able to charge one-bed LHA rates for all the rooms. Is that something you are seeing more broadly?

It is one of the factors. Trying to find units for accommodation that fit within the LHA framework is being driven by these benefit rates, and the market is responding to that.

The Renters’ Rights Bill will come into force later this year. It will have a big impact on relationships between benefit claimants and landlords. I am interested to know what you think the impacts might be, the pros and cons. Perhaps if we start off with the landlords’ view, Ben.

I suspect we do not have enough time to cover all our views on this matter. The Renters’ Rights Bill is coming, and we are working collaboratively to ensure that it works for responsible landlords and renters alike. We recognise that the sector needs to change. We have some concerns about the ability of the Courts and Tribunals Service and the court system to be able to manage the transition, and there are some steps that could be taken to alleviate that. I should start by saying that we want to keep people in their homes. We have a housing crisis. We welcome the commitment in the spending review to more affordable social accommodation over the next Parliament, but the need is now. I say that because, as I said earlier, we have 12 people chasing every available home, but we also have a massive crisis of confidence in the private rented sector. A “jam tomorrow” policy, while welcome, does not deal with some of the pressing issues before us now—this churn within the private rented sector, the fear that investors have around staying in the sector, even coming into the sector at a time when we most need them. That is why we say that court reform and concessions for the student market will be very important. If I dial it back to Local Housing Allowance specifically, we are very concerned about ground 8 repossession for serious rent arrears because the Bill will prevent landlords from using the mandatory arrears ground if arrears are linked to a delayed Universal Credit payment. At a time when we want to encourage landlords to accept all types of tenant who are presented to them, that is a turn-off, particularly when you would wait upwards of 12 months to get possession of your property. If you also look at some of the difficulties around the Universal Credit system, landlords are not treated in the same way as social providers. You cannot ring your local housing officer like you once could and have a sensible conversation. This is about sustaining tenancies. We want to keep people in their homes. We do not want to jack up rents, but to give landlords confidence about the UC system, this particular ground is nonsense. It encourages landlords to say, “Do you know what? I’m going to steer clear because not only can I not get possession of my property, but I am also left with significant rent arrears.” That is what that ground is for. Private landlords need to know whether a tenant is in receipt of Universal Credit, and they may only discover that rent arrears were due to a delayed UC payment at the time of a possession hearing. That will have a huge knock-on effect on the court service. You need this information up front. You do not want to get before a judge, having waited the best part of six or seven months, only to find out that the tenant was on UC and you are not eligible to use that ground. We do not think that landlords should be penalised for the benefit system’s delay, over which they have no control, and the Bill must be amended to remove the Universal Credit delay caveat.

Our members exist to provide long-term, secure, sustainable and affordable tenancies to low-income households. Long-term, lifetime tenancies are absolutely what we do, so to that end we strongly welcome this legislation and its intent. We support the idea that tenants be given greater rights and protections. I also wanted to say that we are very grateful to MHCLG for all the work that we have been able to do with them on some of the finer details of the legislation. There were some potential areas that could have adversely affected social landlords, including housing associations. We have worked with them on ensuring that, even though assured shorthold tenancies will no longer be available, there are still suitable possession grounds in the rare instances when our members use ASTs and need to bring a tenancy to a close. We are satisfied that there is a process in place that will work for our members. One thing we want to flag, echoing Ben’s comments, is that we are worried about the impact on court capacity. Given the abolition of section 21, courts will be in greater demand for possession cases, particularly in the private rented sector. Our members rely on those same courts in the unfortunate instances where we seek to take possession of a home. This is in cases of severe antisocial behaviour, perhaps domestic abuse, some of the worst instances, because normally our members do everything they can to sustain a tenancy. We need to get possession of that home, and the quicker we can do it the better. If the court capacity is not there, that will prolong those cases and prolong the circumstances in which the tenants who are the victims of those things find themselves living.

I absolutely recognise the point about court capacity for things that local government interacts with, and particularly for issues such as antisocial behaviour management that is very important. I will push back slightly on our landlord friends around the UC point, because I think we ought to make sure that the private rented sector is as accessible as possible for people on benefits. We must come to a pragmatic solution that neither landlords nor tenants are suffering from the failures of the DWP. Writ large, we are very supportive of the Renters’ Rights Bill. It has been long awaited. The previous Government had a similar Bill and there has been a degree of uncertainty in the sector for a number of years, which we are now at the end of, and we just need to get on and implement it as quickly as possible to give stability, clarity and the benefits that the Bill brings. Local government is very supportive of the abolition of section 21, the ending of assured shorthold tenancies, the national landlord register, the property portal, the various measures on protecting residents from increases above the market rate and extending the decent homes standard and Awaab’s Law to the PRS, and a range of other things. There is some really good stuff in it. I think the challenge for us is how we can make those laws real. There is a question around local government enforcement capacity, given some of the financial pressures I have outlined. Yes, there is the ability to retain fines and stuff like that, but we will struggle to increase our environmental health enforcement capacity to deliver this in the broader financial context that local government finds itself in. It is important to have those laws, but it is important also that local government can play an active role in helping manage that system rather than the tenant and the landlord having to do it by themselves.

Good morning. I represent a Scottish constituency, and much of housing is devolved, but we are certainly not immune to the challenges linked to supply. My local authority is Scotland’s largest social landlord. It has the most ambitious programme for house building in Scotland. We still have 14,500 people on a waiting list, and within that cohort there are many claimants who need to upsize or downsize in the social rented sector, but we have a particular challenge around the number of properties that are available. Can you outline for the Committee some of the challenges that claimants are experiencing and the scale of the barriers to accessing appropriately sized properties within the social rented sector?

Our members tell us an array of things, and I will get back to your specific question about size. On Universal Credit in particular, over the last 10 years many social housing residents have moved over from housing benefit. We have supported the principle of Universal Credit from the outset in its objective to simplify the benefit system. However, we still find in the annual surveys of our members that arrears levels for UC claimants are higher than claimants on legacy benefits, to the tune of an additional £150 or so in arrears. Why is that the case? The five-week wait continues to be a challenge. While households wait for that first payment, they need to find financial support elsewhere. The advance payment is often the solution to that. The advance payment needs to be repaid, of course, although we appreciate that the amount of that repayment has now been reduced by Government from 25% to 15% through the fair repayment process, which we welcome, but it still needs to be repaid and will therefore take longer. The other issue that our members tell us about is with the landlord portal, which while certainly a positive step, they report that there are still issues around how speedily verification of rent can be undertaken. They report issues around how speedily alternative payment arrangements can be made, and issues around where tenancies change due to a change in circumstances—maybe a joint tenancy moves to a sole tenancy, or other things—it is too slow to update the system, which can lead to problems of in some cases overpayment of benefits or underpayment of benefits. There is an array of issues within the system. On your broader point, our members have told us that the household size most likely to be affected by issues within the benefit system is generally families with children, and particularly a household with three children or more. There is a combination of the two-child limit, the overall benefit cap, which began in 2013, as you will know, and has only been uprated once in 12 years, back in 2023, and so its real value has significantly eroded. For a number of our households, the spare room subsidy, or the bedroom tax, is still having an impact. Those three things together within the benefit system are leaving larger households worse off. This is a non-welfare issue, but the issue is compounded by the lack of availability of social housing with three bedrooms or more. Our recent research shows that, if you are in London and want a home with three bedrooms or more, you might be waiting for 27 years. There are 32 boroughs in London—I appreciate it is not Scotland—where you will be waiting the length of a childhood, 18 years, to be allocated a three-bedroom home. The welfare system and the housing system combined are particularly having a detrimental impact on larger families.

I echo Alistair’s point. The gap between how quickly you can get a one-bedroom flat or a studio and how quickly you can get a two-bedroom or three-bedroom property in my authority is dramatic. It is a year or two for a one-bedroom on average, and then it jumps up to 16 or 17 years for a three-bedroom, and the pressure is going up. We really welcome the additional investment in building social housing that the Government have announced, and that will help local authorities make decisions about building new family-size units. On where we are now, I think there are some issues around the caps to the disabled facilities grant, which is impacting families with disabilities. Alistair has already talked about the impact of the bedroom tax on the family finances of people who are in homes that are of a different size for unavoidable reasons, because of medical adaptations and stuff like that. There are some real challenges in appropriate size properties and supporting people to live in them on the current benefit levels.

I will come at this from a slightly different perspective. About 15% of our members let at LHA rates, and 42% of said landlords do so for social and ethical reasons. I want to touch on the Universal Credit system specifically, because in the change from housing benefit to UC, landlords are not afforded the same level of communication as social providers. I understand why that is, but at a time when we are leaning so heavily on the private rented sector, there are some pragmatic things that can be done to enhance the level of communication between landlords and the UC system. It is no surprise to us that there are higher arrears when it comes to UC, because it is such a big beast to get any information out of. There is a lot of frustration from landlords about the operation of the Universal Credit system. Often my members are not necessarily so concerned about when they will be paid, but a lot of them are overpaid and there is no way for them to go back and say, “You are overpaying me quite a lot of money. I would like to give it back to you.” I mentioned ground 8 earlier, and I think there is a pragmatic solution to recognise that landlords are providing a lot of homes in the private rented sector to Universal Credit claimants. We can make some sensible tweaks by allowing them a little more communication on how the system is working. Otherwise, back to the Renters’ Rights Bill, there is rightly a ban on discriminatory practice, but I do not know anybody who goes back to a bad restaurant. If you have a very bad experience with the system, not necessarily the people—you will get good and bad of all sorts, good and bad landlords, good and bad tenants, it does not matter what background they are from. If the system is not allowing landlords to provide homes and get a bit of certainty about when payments will be made and just know so that they do not get caught out by this change, I do not think that is an unreasonable request. It would go such a long way to give much-needed confidence to the sector. If we trust tenants to receive UC and housing benefit payments themselves, we should trust them to make direct payment to landlords and agents too, because that would solve some of the arrears issues that we see.

I call the Chair of the Housing, Communities and Local Government Committee.

Thank you very much, Chair. Good morning, everyone. Ben, I wanted to come back on some of those points. The reality is that we are in a housing crisis. Everyone says this. We have a situation in which there are about 1.5 million people on social housing waiting lists across the country. We have 164,000 children who are homeless. We need the private rented sector to address this. The Government cannot build those 1.5 million homes tomorrow, but we have a situation where some landlords are receiving in excess of £15,000 or £20,000 per annum in rent. A number of landlords have multiple properties—that is their prerogative—but when it comes to the state of their properties, those same landlords do not want to engage with the system. We have a situation where in some properties there is damp, mould or mice infestations. You cannot contact that landlord for love or money, yet they receive taxpayers’ money for keeping the state of that property unkept. What more could you as an organisation do to inform your landlords about their legal obligations to uphold their part of the contract at the same time as they are receiving Government and taxpayers’ money for a property?

It is a very fair challenge, and I am not here to defend the indefensible or to defend bad landlords, just to be clear. As a trade association, we are here to support landlords, and that is why we welcome the decent homes standard and Awaab’s Law. It is why we welcome the ability for responsible landlords to set out, from the outset, that their properties meet whatever requirement the Government impose on them, just to be clear about that. While it is right that we campaign and lobby, we also put our money where our mouth is in supporting landlords. Last week we had 4,000 contacts from landlords across the country looking for support on a whole range of issues. We have no issue with increased standards. Despite not having a decent homes standard, four out of five properties in the private rented sector already meet that standard. I am not worried about bringing the rest of them up to scratch. Of course, we have to look at things in the round. Landlords and investors are between a rock and a hard place at the moment. There are barriers to coming into the market. I totally agree with you, by the way, that we have a housing crisis—actually, we have a social housing crisis—and the Government are doing their level best to deal with that. As I said at the outset, that is not going to deal with the here and now, so we need the private rented sector to step up. The way that you get the private rented sector to step up is not to impose huge amounts of regulation on it. The private rented sector will thrive if it is allowed to, but at the moment we have significant barriers to entry with stamp duty. That is not going to encourage people to come into the sector. We have things like ground 8, which is just one thing of many. How can it be right that as a landlord accepting a UC tenant, because I certainly do not want to discriminate, I do not know about that and I cannot get possession of my property because of the fault of somebody else? I think there is stuff that Government can do that is just a bit more pragmatic to say, “Hey, guys, we need you to stay in the sector.” I am not suggesting for one minute it is all about tax giveaways and the like, but it is about a fair and reasonable package. The proposals for minimum energy efficiency standards require 5,000 properties to be retrofitted every day to meet those timeframes. That will put the fear of God into some investors, because a £15,000 cap will be largely unachievable if you have a low asset value. It is about taking these component parts as a whole and saying, “We need these guys to stay in the sector. How can we make it as palatable as possible while delivering on renters’ rights?” As an association, we do not want to see damp, mouldy accommodation. We want to play our part in getting rid of that, and that is exactly what we intend to do.

Thank you. We will have to speed up a little, folks.

Good morning, everybody. Thanks for joining us. What are your views on the Government’s announcement in the spending review on increasing spending on building affordable and social housing? How far will that announcement address challenges faced by claimants in the private and social rented sector?

Local government has been calling for this for a long time. Looking at the whole package, it has a lot of things that we have been campaigning for, such as the direct capital investment and the near doubling of the overall grant settlement to £39 billion, at the same time as giving rent stability over 10 years at CPI plus 1% and a number of other things like the £2.5 billion in low-interest loans for social housing providers. This is a strong package overall, and I know more stuff is coming forward today on the housing bank and so on to help give confidence to the market. Local authorities not only want to build new homes but also want to deal with things like Awaab’s Law and so on—all these other pressures on housing providers to meet their commitments to keep the standards that we need. It is incredibly welcome. Certain other changes in the Planning and Infrastructure Bill will, on balance, help to deliver those homes at a greater pace. However, the pressures that local government has been under for a long time create capacity challenges. The housing association sector has been facing a period of challenge as well. It is about getting those providers on board. At the moment there are still real pressures, particularly in places like London where it has been uneconomic to build new homes in large chunks of the city. Issues with the Building Safety Regulator and others need to be challenged. They are well beyond the remit of this Committee, although perhaps not for Florence’s Committee, but huge things need to be done. This is welcome. Briefly on what Florence said about renters’ rights, we believe that the sector needs better policing and that is why the Renters’ Rights Bill has been brought forward. Local authorities have an important role to play on that side. However, to be clear, some of the worst conditions are in the very small proportion of properties at the lower end of the market. At the same time as asking to increase pressures on landlords and giving local authorities the power to enforce on them, that needs to be matched by rising LHA levels that will enable them to invest more effectively.

We have had a tremendous announcement on social and affordable housing in the last week. The NHF and our members have enormously welcomed it. We hope that it marks the start of a decade of renewal and growth for our sector, which has been seriously affected by cuts to capital funding and revenue funding over the course of the last 10 to 15 years. The announcement of CPI plus 1% over 10 years, a consultation on rent convergence, which will ensure that rents meet the balance between the investment needs of landlords and continued affordability for tenants, and equal access to building safety funding—we have been lobbying and campaigning for that for a long time—has now been granted, plus additional funding for building safety. We expect more funding is coming through the warm homes social housing fund to be announced in the autumn. This package, together, is strong for social landlords. We have continued over the course of the last 10 years to make a big contribution to social and affordable supply at around 40,000 to 45,000 homes a year. We hope that we will be able to build on that and increase it over the course of the next decade. Our members will be going away and, over the course of the next few weeks, crunching the numbers, looking again at the inputs and recalibrating what they can do. We look forward to continuing those conversations with the Government over the course of the next few months.

Briefly, we absolutely welcome the commitment to affordable and social housing. As I keep banging on about, the need is now. To go back to Florence’s point, if the state is paying for substandard, crappy accommodation, it should not. It is as simple as that. Give the good, responsible providers a break and make renters’ rights and minimum energy efficiency standards work for them. Throw the book at those people at the margins who exploit others and provide rubbish accommodation.

Going back to the issue of supply, though, how can we encourage registered providers to build homes for social rent rather than affordable rents?

That is very much in the design of the affordable homes programme. We greatly welcome the new programme that has been announced of £39 billion over 10 years. We understand that more decisions are yet to come on the exact breakdown of the programme, but the Government have already been clear in stating their intention to pivot towards homes for social rent. If you look at what has happened over the last 15 years, we built homes for affordable rent because, in 2010, capital funding was cut and there was no funding for social rent available for several years until the Theresa May Government restored some funding for social rent in the latter part of the 2010s. With the funding in place via Homes England and the GLA, our members will go back to building homes for social rent. There has been a small increase towards social rent in the last few years. We are getting back towards 10,000 or so, and we expect that to continue. It will take a long time to get back to the levels at the end of the 2000s on social rent, but with the funding in place and the programme loaded towards social rent, I am confident that trajectory will continue.

A large number of councils want to build for social rent. It is right to do. It also helps us with our temporary accommodation prices and being able to move people out of TA into council homes. Again, it is about making sure that the overall financial package stacks up to enable you to build it. Rural areas have issues of land remediation and infrastructure. In urban areas, quite often leaseholder buyback and other things mean that schemes have to work hard to wash their faces at a time when private sale values have plateaued and building costs have gone up. We are not out of the woods yet, but this package is an important step forward to enable people to focus on building social housing.

In my constituency of Torbay, we have the joy of only 7% social rented housing. That compares with a national average of 17%. Of course, when Margaret Thatcher came in, it was 34%, which is a disturbing context to reflect on. I have questions for you each in succession. Ben, you have already done a good job of reflecting on some of the challenges for private sector landlords. Clearly, in my patch, the private sector ends up doing a lot of heavy lifting. What other bits do you want to unpick around the DWP world that could assist private landlords to step up and do some of the heavy lifting? Alistair, you made an interesting point about Local Housing Allowance and the viability of some schemes. What could be unlocked for the viability of some patches if the Local Housing Allowance was raised? Adam, I am sure you will have some reflections on both angles at the end.

On how landlords can do a bit more heavy lifting, if I put it in the Torbay context, LHA does not cover the rent in 56% of households. I am guessing you probably have some Airbnb and holiday let issues. We should never be in a position where private investors are better off letting to a stag do or a hen party. It has to be long-term, sustainable renting. Successive Administrations have got this wrong. I appreciate that the tax position when it comes to furnished holiday lets is being aligned, but this was entirely predictable. The only reason those investors moved to the holiday let market was because it was more lucrative and allowed them to offset their costs. If we want private landlords to do some of the heavy lifting—and whether we like it or not, they will have to because we are incredibly reliant on the private rented sector—things can be done to the tax system to incentivise the right behaviour. That can extend to minimum energy efficiency. At the moment, if you choose to upgrade your heating system in some way that is not a combi boiler, you cannot offset that against your tax. Some nudge theory things could be done so that landlords are encouraged to do the heavy lifting. I come back to my other point. We need to come down very hard on the providers who are gaming and ripping people off. I am not here to defend those people. Nobody is. It means frontloading enforcement, but it also means making sure that the sector is a welcoming place for investment because you will not tax your way out of this problem. You will grow your way out.

On your question to me, I would like to make a couple of points around how you could get more social housing built in places such as Torbay. The first prerequisite is that the local planning system has to be well resourced with a local plan that is up-to-date and in place and clearly sets out how much housing is required locally, including how much social housing is required. That is an important prerequisite everywhere across the country. The second point is, with that in place, for the viability of schemes the full package of measures will enable social landlords to build. That is why the announcement on rents and affordable housing funding together is important, plus the funding that I mentioned earlier for building safety and decarbonisation. That means that the mix of funding for building a social home, hopefully, can now shift. The reason it has been challenging in recent years is too much reliance on relatively expensive debt, with interest rates having gone up, and too much reliance on housing associations having to draw on their own financial capacity to build new homes, meaning they cannot spend it elsewhere. With more grant funding in the mix, hopefully, and slightly better access to loan finance, which is not as expensive, you can change that mix, improve the viability of those schemes and build more social housing.

To pick up on the Airbnb point, as the leader of the local authority with the largest number of short-term lets, my borough has between 10,000 and 12,000 properties that have gone over to permanent Airbnb and then another couple of thousand medical lets providing particular services to the international community going to hospitals here in London. If we were able to bring that supply back into the PRS, it would make a dramatic impact, particularly at the lower end of the market in our area, as well as tackling the ASB issues that I am sure you experience in Torbay as well. We are keen that the Government crack on with the promised registration scheme and also make sure the registration scheme is robust. A light-touch registration scheme does not enable you to track. For example, in London, the 90-day rule still applies and is routinely broken. If you are not able to track the number of times a property is used through the platforms, the registration system will fall short of its goal to help us with housing supply, which is important from a MHCLG and housing perspective, although possibly less far up the priorities for DCMS. That is some of the challenge we face. Then move quickly to a stronger licensing scheme overall to help regulate the sector and make sure that things are properly enforced and, outside London, look at the planning system, although without what the previous Government were going to do with permitted development, which would have created a free-for-all. It is so important to increase supply because that has been one of the biggest issues with taking stuff out of the local housing supply.

I do not know that my members necessarily are in the temporary accommodation market. I would much rather see the private rented sector be supported as a sustainable investment so that kind of temporary accommodation market is not necessary in any way, shape or form. The difficulty with temporary accommodation is, of course, it is not terribly temporary any more. Government have set out spending on social housing, but when it comes to the private rented sector, a proper long-term strategy for the PRS role would probably negate a much less frequent need for temporary accommodation, which is something I think we would all want to get behind. We should never be in a position where investors are somehow better off investing in the temporary accommodation market, in my view. We want to encourage long-term, sustainable renting of decent homes, yes, where people make a sustainable profit. Let us not have that in other sectors. We failed miserably when it came to holiday lets, and that is being corrected. My colleague is right that, if those properties come back into the private rented sector, it will make a massive dent, which is exactly what we want. But we should not assume that, by levelling the tax regime, everybody will follow the private rented sector. I would urge that, while the Government are regulating the private rented sector, they need to take off the stranglehold a little and incentivise people to stay. It is long-term tenancies that are coming to an end that are putting pressure on local authorities, and the whole “stay put” nonsense blocking properties from being available to somebody else, so they land in temporary accommodation, which is an absolutely dreadful place to be for kids and families—anybody, quite frankly.

I broadly think it is helpful. Local government is keen to do that. They are currently funded in various different ways. We will want to get into the detail, and obviously we will happily take any questions once we get further into this, but the principle is very much there. We are conscious that there are lots of particular things like the holiday activities fund that is being funded from the household support fund, and we want to make sure that some of those things that are important for tackling the welfare of children, for example, are covered by the fact that we are dealing with a massive TA crisis that sucks funding into those things. In principle, we want to support it, but obviously we want to see more money. DHP is an enormously important way that councils can react to specific local circumstances to keep people in homes, and it ultimately saves money in the long term if you are not having that person come into the TA system. The previous cuts to DHP levels have raised concern, but we want to move forward. Briefly on the overall market, there are significant investors coming into the temporary accommodation space because they are spying an opportunity. Ultimately, local authorities are desperate to get people out of the hotels—there is another set of people going into the hotels and they are providing stuff specifically for that, but I am sure you have not got time for that—and people are coming into the long-term temporary accommodation space because local authorities are having to pay way over the LHA levels to get them. Therefore, investors are saying, “We can lock these authorities into long-term deals” either to acquire properties themselves, or long-term lease arrangements that are saving them money over what they are having to pay the hotels. They are significantly more than the LHA, so it is effectively locking some of the housing pressure on local authorities into the medium and long term.

It is helpful for local authorities to have properties they can acquire and properties on long-term lease arrangements. What I am saying is that it saves us money now. If the LHA was to correct itself over time, obviously local authorities may be locking themselves into arrangements that become less economic. Yes, broadly having more opportunities in the system is helpful but, as others have said, we want to avoid that in the first place. The most efficient thing is social housing, because you are not having to pay that delta in costs and welfare. Having more opportunities is helpful, but it is because they are spying an opportunity under pressure.

Very briefly, we support the move in principle, including the move to multiyear funding. Our members have said, however, it is important that the new fund still offers the same levels of flexibility as they have supported many of their households to access funding from both of those streams, usually to make up for issues within the welfare benefit system where households have ended up short on income and have not been able to make ends meet.

What impact can supported housing have on people in receipt of benefits?

Supported housing plays an enormously important role within the wider housing system. Our members supply 75% of all supported housing and are committed to continuing to do so, even within what has been, especially for supported housing, a particularly challenging funding environment where the viability of supported housing has been squeezed and squeezed, particularly due to cuts in revenue funding over the last 10 to 15 years. Supported housing offers enormous value to those who live in it and enormous value to the wider public purse. Our recent analysis shows that the value of supported housing to the taxpayer is £3.5 billion a year in savings made through preventing pressure on other parts of the system. Our members also tell us, as much as they are firmly committed to continuing to supply it as much as possible, that due to funding pressures they have had to close schemes in recent years. One in three had to close schemes last year due to funding pressures and 60% say they are considering closing schemes in the near future. This is a combination of issues, including the changes in national insurance contributions and the reductions in revenue funding that I have mentioned. We think there still remains an opportunity with this Government—with the long-term housing strategy they have committed to publishing—to mark a statement of intent on their plans for supported housing, given the important role supported housing plays within the wider system of supporting people through a journey away from homelessness on a pathway to long-term, secure housing. It is a vital part of the system. Without it there would be a lot of pressure elsewhere, and it would affect the Government’s ability to deliver on their housing and homelessness strategies. Indeed, additional pressures are also brought to bear on the NHS and social care systems where supported housing is not in place. Overall, we are extremely proud of our supported housing offer. We also love to invite MPs to come and see their local schemes, and we encourage our members to do that all year round. We will be doing that through our Starts at Home campaign later this year, and we look forward to continuing to work with the Government on a sustainable future funding settlement for supported housing.

I absolutely support the opportunities provided by the additional funding that the Government have announced for new build, to help make sure we have a supply of supported and properly adapted accommodation coming into the mix, because we know there are particular shortfalls and shortages. Obviously, we need to make sure there is the appropriate revenue funding to go alongside it to make sure the services are effective.

Briefly, we are very supportive of supported housing. It is one of those areas to which some of our members are pivoting, particularly those with large HMOs, given the Renters’ Rights Bill and the impact it will have on student housing. It is one of the positive examples of how the private rented sector can be a force for good in making their properties available on longer-term leases for homeless people transitioning from prison, care or whatever it happens to be. We are seeing a slightly different step from our members on this at the moment, so we welcome it.

What role do you think social housing providers could play in helping move claimants into employment and improved earnings?

They do a huge amount of work in this space. I want to flag the JobsPlus pilot, which was a recommendation made by this Committee back in 2023, and the Government started it in 2024. It is a community-based employment programme that is being piloted across 10 areas, with housing associations at the heart of every single one of those. Outside of that, many of our members have specific schemes in place. Clarion, our largest housing association member, last year supported 1,700 tenants directly into work and another 5,000 with skills and training. Our members have relationships with the people who live in their homes. They understand the importance of tenancy sustainability, and the importance of work to that. That is why they choose to do this discretionary activity on top of their core activities of helping tenants to find employment and to improve their employability.

I am very conscious that we are pretty much out of time, so I will be incredibly brief in building on Johanna’s questions. We talked about supported housing, but what impact does not having access to affordable, secure and high-quality housing have on pensioners and children?

It is incredibly damaging. The reason it is so important that we provide the next generation of council homes for social rent and tackle the temporary accommodation crisis is not just financial for councils. It is because the quicker we can provide stable, good-quality homes to people, the better the life chances of the children who are growing up in those homes will be. It is a moral case, and it is also a long-term investment, both socially and economically, to get it right as early as possible. As I said, there are all sorts of things that social housing providers and councils are doing to give people opportunities, but it is absolutely essential that we get this right because the co-benefits of getting it right are so vital. For children it is their long-term life chances; for older people, living in a home that does not have damp and is well heated will have a significant impact on NHS bills and adult social care. Having a properly adapted home can save adult social care a significant amount of money and investment. If you get the homes right, the knock-on benefits are huge.

One of the specific impacts of a lack of access to social and affordable housing is overcrowding. Research we published in 2024 showed that more than 300,000 children were living in overcrowded homes. That has huge knock-on impacts on their ability to do homework, mental health impacts and wider health impacts. Children talking about feeling a sense of shame in inviting their friends home. There is greater pressure on families, who are more likely to be in conflict. A whole raft of things comes from that lack of supply, leaving people living in inappropriate and overcrowded homes.

Better housing gives better health outcomes. That is something we can all welcome, and it is why we are supportive of the high standards in the Renters’ Rights Bill, done in the right way.

Thank you so much, and that concludes our questions for you all. It has been enlightening. Witnesses: Ben Twomey, Charlie Trew, Hannah Aldridge and Hilary Burkitt.

A very warm welcome to the second panel of this Local Housing Allowance evidence session to the Work and Pensions Committee. It is a pleasure to welcome Hilary Burkitt, Hannah Aldridge, Ben Twomey and Charlie Trew. Would you like to introduce yourselves, very briefly, and the organisations you represent?

Good morning. I am Hilary Burkitt. I am housing policy manager at Independent Age, and we are the national charity representing older people facing financial hardship.

Hi, I am Hannah Aldridge. I am a senior policy and research officer with Child Poverty Action Group, and we are an organisation that campaigns on child poverty and social security.

Good morning everyone, I am Ben Twomey. I am the chief executive of Generation Rent. We are a campaign group that stands up for private renters across the UK.

Good morning, my name is Charlie Trew and I am head of policy at Shelter, the housing and homelessness charity.

Thank you. Are you able to say what the cumulative impact has been on people on low incomes who rely on housing benefit or the UC housing element of freezing Local Housing Allowance for several years? It increased only last year. What are the observed impacts that you are aware of?

It has been significantly challenging for many low-income families who have struggled to find and retain properties. One of the challenges we have is that about 1.7 million people claiming housing benefit and affected by LHA, which is roughly equivalent to over a third of people in private rented households. The LHA freeze essentially stops people finding a home they can afford in the private rented sector, and because rents have risen quite significantly over the last period, we are seeing people with a massive shortfall between their income and their rent. That means that families are forced to cut back on their food and other bills, and to try to reach into other benefits to pay for this. The freeze is a significant challenge because the rates are set from September 2023, even though it was introduced in April 2024, but rents have significantly changed since that time. We are seeing that the entire sector is calling for LHA to be unfrozen. Even at the 30th percentile, even if it was actually at rents as they currently exist, many families would still face massive challenges. At the very least, you need to have it at about the 30th percentile. LHA is driving homelessness. It has encouraged landlords to move away from letting directly to LHA claimants because there is a shortfall, and they are worried about that. It is also a challenge because it is luring some landlords into the temporary accommodation sector, which often has very terrible, disastrous situations. One of the challenges is that you are seeing a housing policy that is effectively driving people into homelessness, and then you are making it lucrative for providers to be in the temporary accommodation sector where they might charge nightly rates. Unfortunately, recent analysis by CIH has suggested that LHA covers the cost of rent in less than 20% of areas for two-bedroom homes. Crisis and Zoopla research recently found that, between April and October 2024, just 2.5% of private rented properties listed in England were affordable for people on LHA. The figure was 2.7% across Great Britain, and essentially that has a major impact on people. It desperately means they will be driven into homelessness unless we unfreeze that housing benefit. One final critical point is that this does not affect everyone equally. Households from racially minoritised groups are more likely to be claiming housing benefit, according to research we did in 2020. That means that if you freeze housing benefit, you are not affecting every single community in the same way. It can have racial impacts as well.

I support everything Charlie has just said. Local Housing Allowance is a lifeline for people. Everyone needs a home. It is the foundation of our lives. The problem with freezing it, as has happened again this year, is that it is not based on the changing level of people’s needs. It is based on a Government choice, which I think is important to remember. When we think about those affected, as Charlie said, 35% of privately renting households are receiving Local Housing Allowance, and 49%, so half of those receiving Local Housing Allowance, have dependent children in the home. That is at least 1.74 million children. It has been 11 years since the last child poverty strategy was published, so when the next child poverty strategy comes round it has to think about housing cost, which is a key driver. Basically, when people cannot afford to cover their biggest single cost in a month, which is housing, they will find themselves pushed into poverty, debt and homelessness. If we focus on that last point of homelessness, as long ago as 2020, so five years ago now, Policy in Practice found a robust correlation between the number and proportion of households with a Local Housing Allowance gap and homelessness. In other words, the more that people are unable to cover their rent with Local Housing Allowance, the more people there are in temporary accommodation. Policy in Practice estimated that, for every 1,000 households experiencing a shortfall between their Local Housing Allowance rate and their rent, 44 will require temporary accommodation. There is a direct knock-on financial cost for local councils, but there is also the cost of impact for all of the children and families who find themselves homeless today.

Hannah, could you also include in your response the impact and the interaction between this and, for example, the benefit cap?

Following on from what Ben said, housing costs are essential in thinking about child poverty. Housing costs push 1.1 million children into poverty and especially in the private rented sector, which now contains the largest number of children in poverty—more than in the social rented or owner-occupied sectors. There are 1.1 million children growing up in the private rented sector in poverty. The Local Housing Allowance essentially sets how much housing support you can get for different numbers of bedrooms, depending on how large your household is. The benefit cap applies to working-age households that do not include someone with a disability and are earning less than about £850 a month. Those families are subject to the benefit cap, which generally is lower than the Local Housing Allowance amount. It applies nationally at the same rate, regardless of whether you are a couple with no children or a couple with three children. Ultimately, it means that people affected by the benefit cap, when they need more bedrooms—say, if they need three bedrooms—are entitled to less than families who need two bedrooms because that benefit cap level is the same. They receive more in subsistence benefits, so what is left for the housing benefit is much lower. On the impact on poverty, the work that we do with families in poverty shows that the people in the most extreme circumstances are the ones affected by the benefit cap, because the amount they can spend on their housing is so low that they end up paying for their housing through the vast majority of their other benefits, leaving very little behind for their basic needs.

I thank the Committee for looking at older people in this hearing. I know through the pensioner poverty inquiry you have heard a lot about the intersection between poverty in later life and housing costs. This is a particular issue for people in the private rented sector, as 37% of older private renters are in poverty. We know that, without any policy intervention, the number of older people who are renting privately will increase. From our research, by 2040 we are expecting one in eight people over the state pension age to be in the private rented sector, which would be a huge increase, quadrupling the number from where we are today. That is so closely intersected with people’s housing costs. Housing costs are driving that poverty, and Local Housing Allowance rates are a key element of that. We know, again from our own research, that over half of the older people in the private rented sector claiming housing benefit feel anxious about affording their rent, so the housing benefit is not providing assurance that their rent will be covered. They are feeling anxious about it, and we see how it is actually affecting people. They tell us that they are having to go without heating their home, without making hot drinks because they are worried about the cost of boiling the kettle. We are also seeing a wider intersection between older people renting privately and living in poor-quality housing, because that is all they can afford. That means they are living with damp and mould and disrepair, which has a knock-on impact on their health and wellbeing. Again, that has wider societal impacts in the cost to the NHS and social care.

Obviously, one of the issues is the availability of properties at the LHA rate and the fact that there are not as many of those properties. Another area is payments to help local authorities with homelessness prevention. Are you worried that the Government are now ringfencing the homelessness prevention grant? In effect, you are seeing more local authorities spending on that rather than temporary accommodation. That, in effect, impacts people living in temporary accommodation who are claiming Local Housing Allowance. Have you all been looking at that individually?

It is not something we have looked at in detail yet. The challenge here is about the Government’s strategy for addressing homelessness, which is why the homelessness strategy will be so critical in defining how we do it. We saw £39 billion for social and affordable homes in the spending review, which is a very critical thing, but we need to see that go towards the right types of homes. We need to make sure that we are building genuinely affordable and social rented homes for families and so on, to get people out of temporary accommodation. The key challenge with merging the household support fund into the crisis and resilience fund is less the merger and more the reliance on discretionary payments. HPG is critical in making sure that councils can help and support people who are homeless, but we need to see a wider, whole-system view across the piece. From social housing towards your support for councils, you need to make sure they have the right resourcing and that you are not entirely reliant on discretionary payments within the CRF and so on.

I will add a related point on how private landlords, taken as a whole, are a totally inappropriate place for many of the people receiving Local Housing Allowance to be renting. I think that was made clear when the landlord group witness, who was asked about the supply of homes and how important that is—and we support that—spoke about how hard it is to evict people. It is evictions that are making people homeless, it is evictions that are making councils have to pay more to protect people in their homes. One of the ways in which there is more money moving around the system, but not necessarily where it ought to be, is that a Generation Rent freedom of information request this year found that councils were spending their money to get their foot in the door with private landlords where they need emergency accommodation for people to live, and to sustain tenancies. The incentive payments that they make to landlords, bearing in mind that the council usually takes on the full responsibility for the tenancy and does all of the related activity, were worth an average of £3,000 in many places. In Manchester, for example, the city council used them 1,100 times in the last year. Three times a day, they were making incentive payments to private landlords to a total of over £3.3 million. These are private landlords that are effectively profiting from the crisis that we have, which underlines the need for more social homes because that is the only way we can safely protect people where there are unchecked rent rises in the private rented sector.

Do you think that the Government should release a target on how many social homes they want to build?

Yes, it should be 90,000.

We asked the last panel about discretionary housing payments and the household support fund. What are your thoughts about those funds being brought together? How important are those funds for the local authorities that you see? Also, they are spent and used differently in different places as they have a discretionary aspect. Do you have any reflections on where they have had the best impact?

Our advisers speak to older people experiencing issues with their housing costs, and we hear that understanding the differences between how local authorities approach the use of discretionary housing payments can be a challenge. They do not know from one local authority to another whether they are likely to receive a DHP. There are issues with how it is difficult for individuals to navigate the system at the moment. It is even difficult for advisers, who are experienced professionals, to understand the differences between what is happening in different local authorities. Stepping back to look more widely at the proposed merger of discretionary housing payments and the household support fund in a crisis and resilience fund, potentially that could be welcome, particularly if it gives greater clarity and easier access to the system. The critical thing is that any new fund must continue to provide the same level of support in helping people with their housing costs. At the moment, we have a social security system that has a lot of gaps. Discretionary housing payments are papering over a lot of those gaps, including by providing people with long-term support to keep their tenancy and make their rent payments in the private rented and social rented sectors, including for older people who particularly need their home because maybe it has been adapted or particularly meets their needs. If we have the social security system we have at the moment, with those gaps in it, we must make sure that any new fund continues to provide the support for people who need it with their housing costs.

One challenge with discretionary payments is that they are discretionary. The challenge is that you have inconsistent application across different local authorities. Somebody in one area can get support for one thing and then not get it in the next area. The second challenge is the timeframe within which they are spent. One area might end up spending all of its funding earlier in the year, which means there is no support later in the year. Alternatively, they might start turning people down because they are worried about whether they will have cash for the remainder of the year. The challenge with these kinds of funds is they are a stopgap, a sticking plaster on the solution, rather than the actual solution. It is obviously welcome to see the same levels of funding announced in the spending review. On the merger, there is a mild risk that councils might end up spending it on the wrong things. They might not be spending the funding on things that will prevent homelessness, which is the critical concern here. There are some cases, for example, where a council has ended up allocating that cash to their own council tenants, which they obviously have the power to not evict if they go into rent arrears, rather than helping to sustain someone in the private rented sector who might be facing a challenge where they might genuinely become homeless. There is a critical component here where it needs to be focused on people who are in need of it for the prevention of homelessness, but fundamentally it will not fix the challenge of the freezing of LHA and the challenges that we have seen with the benefit cap, the bedroom tax and things like that.

I agree with Charlie. The problem with discretionary housing payments is they are described as discretionary, but they end up helping families with a systemic shortfall in paying their rent. That is not what we should be fixing through a discretionary payment system. Merging the two systems and giving councils long-term funding has the potential to be useful, but ultimately that pot will never be able to do what it is designed to do while the housing benefit system is not providing households with what they need.

I am sorry to say that in my constituency I often find that the area where people are most likely to get emotional about the challenge they face is housing. Hilary, are there any other elements of older people and housing that you would like to unpick for us? Then I would like to move on to PIP payments with Charlie. The coming changes to PIP have been well flagged. What are you finding with how claimants may be using PIP to assist in their housing challenges? I am sure other panellists may want to chime in at the end.

The particular challenge in the private rented sector is about older people who are struggling with their costs, as we have just talked about, or who are going to homes that are unsuitable either because of their condition, their accessibility needs or being stuck long term in a home that is deteriorating without being able to challenge their landlord or change where they live. They end up either forced into or trapped into a home that is unsuitable for them. On how that can be addressed, we welcome a lot of the changes in the Renters’ Rights Bill and very much look forward to those being enacted. Some of the things that we think will help include increasing the notice periods when people face eviction, which may help older people to have the time they need to organise a move and find accommodation that is more suitable for them. In the absence of Local Housing Allowance being unfrozen or changed, often it is completely impossible for people to find a suitable home that they can afford, so we need to address that. There are things in the Renters’ Rights Bill like the introduction of a private rented sector database, which could be an opportunity to better inform tenants on property standards and accessibility to help people find a home that is suitable for them. On the issues with older people being disproportionately likely to be stuck in homes that do not meet the decent homes standard or that are cold and hard to heat, the introduction of enforcement of new decent homes standards in the private rented sector could be a huge step forward, as could the introduction of new minimum energy efficiency standards. We hugely welcome moves in that direction because we think those could be lifechanging for a lot of older people who are stuck in poor-quality housing.

The key challenge for someone with a physical disability is finding a suitable home that is also affordable. For example, if you are in a wheelchair, it can be very challenging to find a place that has enough space for you to store your equipment—that is appropriate for your needs, essentially. With the lack of that more generally in the housing system, and especially in the social housing sector, that means that people are often forced to pay more to access that. Generally, people are using their overall benefit rather than just their housing benefit to pay their housing costs. The big challenge with the PIP proposals is that there is a double whammy of cutting both PIP and carer’s allowance. You might see in many cases—let’s say it is a couple with kids, or someone might be supporting their partner—that carer’s allowance might be their income in that scenario. Many families will have a significant cut to their income in that situation that makes it untenable, and it will be really challenging. The other point is about the benefit cap. PIP claimants are exempt from the benefit cap, which means that if suddenly they are no longer eligible or that changes, they will start being hit by the benefit cap. You have a massive challenge that will limit their income even further. In the short term, for people who have a tenancy, that will cause massive shortfalls, but it will also make it even harder than it already is to find somewhere that is affordable and suitable, which is a major challenge that we face for anyone with any kind of disability.

There are flaws in the Local Housing Allowance system before it even impacts people’s benefits. There are five built-in issues, but I will be really quick. First, rent is paid in advance. You pay for the month that you are about to be in the home, whereas benefits are paid in arrears. That always causes a problem near the start of tenancies, but it can cause problems throughout. Secondly, Local Housing Allowance is based on actual rents in England, Wales and Northern Ireland. In Scotland it is based on market rents. That means that, outside of Scotland, when it is pegged to the 30th percentile it is based on what people are paying in tenancy at the moment. If you are booted out through eviction or you need to move for any other reason, you will struggle against the market rent because it is not pegged to those levels. Thirdly, when LHA was uprated recently, it was only to the 30th percentile. I have already said that 35% of private renters need Local Housing Allowance, so even if all of them were in the lowest-value properties, which they are not, you would have enough for only so many. There would still be people who are not able to cover their rent. Fourthly, the actual rate is based on six to 18 months’ old data; it is not up to date. We are talking about the April 2024 decision to uprate to the 30th percentile. That rate is based on October 2022 to September 2023. You have seen the rates of rent inflation since then. Obviously it is out of control, and even when that uprating happened, on that very first day people were behind with that shortfall in paying rent. Fifthly, which I have mentioned already, is the level is not based on evidence or need. It is subject to the whims of Government. When you combine those five things with the flaws of the Local Housing Allowance, all of which are eminently fixable, this is the type of thing that is pushing people into poverty, debt and homelessness.

You mentioned the impact, and Steve touched on the proposals for PIP. If they had a choice, which bill would people on a low income, who face seeing their income squeezed further, choose to cut? If they stop paying their rent, it could lead to more people being evicted.

We always advise people to prioritise their rent over any other bill, because keeping a roof over your head is the first thing. We always say to anyone in that situation, “You must pay your rent first, otherwise you will lose your home. You might be able to claim other kinds of benefit support.” That is not necessarily what everyone is able to do. Absolutely, we are concerned that people will become homeless in that situation because, even if they are prioritising their rent, they will not be able to afford it. We are concerned at the level of people with a disability who will end up homeless or permanently in TA because they cannot find a suitable property.

Certainly for the families that we speak to, rent is the bill that they all prioritise first because of the threat of eviction and, if they have children, uprooting their families. Ultimately, that means everything else gets cut back. We had a case where somebody was affected by the benefit cap and her rent was higher than her full benefit entitlement. She was using candles instead of lights to keep her electricity down and was going to food banks, and she had children. Even though the benefit system says, “This is how much we will help you with your rent”, families end up spending much more on their rent.

We hear that people are cutting back on absolute basics to be able to afford their rent. As I said earlier, people are not boiling their kettle and not running a bath. They are cutting back on food, not heating their homes, and all that has a deep impact on people’s health and wellbeing.

The cost of living crisis seems to have slowed—it is something that people don’t talk about as much any more—but the cost of renting has continued at pace. There is a good reason for that. The cost of renting is effectively unchecked. If you compare it with other bills: for energy bills, there is the energy price cap; for water bills, the Government take a keen interest in controlling prices; for the food shop, there is a highly competitive market out there that is lowering prices. Those things don’t exist for renters. The unchecked ability for landlords to raise the rent has been a serious ongoing problem.

Families will prioritise their rent, but they want their rent to be lower. If they can lower their costs, they will seek to do so, but generally we speak to families who say there is nothing cheaper out there.

Thank you for coming to speak to us today. We heard from Charlie earlier about the difficulties that tenants with disabilities have in securing suitable housing. Could you talk a little about people who are disabled through their tenancy, engagement with the disabled facilities grant and how easy or not it is for disabled people to access additional levels of support?

Looking at the experience of older people who are private renting, one of the challenges at the moment is that people do not understand or have the knowledge of what they are potentially entitled to or what they can ask their landlord for. Beyond that, even when people know, they are scared to ask their landlord. They are scared of rocking the boat because that home is all they have, and if it means living in a home that is unsuitable, they will continue to do that rather than ask their landlord. Part of this is because of the insecurity in the system at the moment and hopefully the Renters’ Rights Bill will go some way to addressing that. Even with an end to section 21 no-fault evictions, we still have the risk of people facing unchecked rent increases. The two things we hear are that people are worried about losing their home and about the rent going up. We think there is a real issue that, in the absence of any limits on what rents landlords can charge, people will still have those worries. Coming back to the point about awareness, there is a lot of good practice out there. For example, there is the work that the Centre of Ageing Better is doing with good homes hubs, people being supported to understand what they are entitled to, working with landlords to help them access that and, in conjunction with the tenant and landlord, finding trusted tradespeople who can do the work. That is with disabled facilities grants but also accessing improvements on energy efficiency. A lot can be done in providing people with the handholding they really need. We find that people on their own don’t have the confidence and have legitimate fears about approaching their landlord to ask for changes to their home.

I echo the point that Hilary made, which is that there is a challenge in accessing a home. I am hopeful that the more security they get with the Renters’ Rights Bill might allow people to ask their landlords for adjustments to their home, but the big thing, as we have noted, is the lack of in-tenancy rent stabilisation. Essentially, a rent rise could be as good as an eviction for many of those people. There is still that threat. People might feel scared about asking for adjustments in their home if they feel their landlord will turn around and say, “We will put the rent up then.” The current Renters’ Rights Bill needs rent stabilisation because that is a big gap.

How do you describe the relationship between insufficient support for housing and poverty level, particularly for older people and families with children? If you could focus on those, I would be grateful.

Within the private rented sector, families with children are innately disadvantaged because they are competing for properties with couples with no children who need one-bedroom properties. They can push the price up. Couples with children do not have the same earnings capacity because of their childcare requirements, but they also need more bedrooms. They are innately disadvantaged within that market, which is why housing benefit is so essential in levelling the playing field and allowing families to secure homes that are simply decent for their children. That is not the system we have at the moment. Ultimately, we see lots of families having to make compromises both in the quality of their housing and in paying their rent through other benefits. We see lots of people living in damp and overcrowded housing. That has a detrimental effect on children’s educational outcomes and their health as well. We recently did a survey, which will be published soon, with the Royal College of Paediatrics and Child Health. We surveyed over 300 paediatricians, and over 90% of them said that housing was causing poor health outcomes in the children they were treating. So often they talked about damp. One paediatrician described how, when a child has asthma and they return to a damp home, they can do little except increase their dosage, which has long-term side effects. It means those children end up missing school. They are not able to participate in sporting activities. It has such a knock-on impact. The fact that parents do not have purchasing power or any power within the rental market has a long-term detrimental impact on children.

We see similar issues and a real intersection of different problems causing a vicious circle. Poverty and the insufficiency of the housing benefit system push people into the poorest-quality accommodation, which is often older, energy inefficient, harder to keep warm and costs more to keep warm. It increases people’s housing costs and energy costs, exacerbating their poverty, which leads to people underheating their homes, which can then exacerbate damp and mould. Living in a cold, damp, mouldy home can cause and exacerbate health conditions, which all has a wider impact on health and wellbeing. That can make people less resilient, makes it harder for people to access support entitlements and then further exacerbates poverty. It is a big interconnecting cycle. Some of the interventions are the things that we have already spoken about, like the need for adequate housing benefit support, the need for decent homes standards and higher energy efficiency standards in the private rented sector, improving rights through the Renters’ Rights Bill. Also, we have not mentioned more support with energy costs, including a new social tariff, which would help break this vicious cycle where people are stuck in a poor housing situation and their health, wellbeing and poverty become worse as a result of their housing situation.

Ultimately, particularly for children, if you end up homeless, you are in the temporary accommodation sector. Record levels of children are homeless. Some 165,000 homeless children are in temporary accommodation. The challenge is that has a major impact on their education, first and foremost. They may be many miles away from school, which means having to take multiple buses to get into school, which means they are already at a disadvantage compared with other kids because they are travelling miles and miles. They may not have space to do their homework. We have supported people who have to do their homework on the toilet during their GCSEs. That is not giving them a good foundation of education. They may not have, in some cases, proper facilities to do washing, which means they turn up in clothes that are still wet because they cannot dry them. A lot of the time, those homes are damp and mould-riddled, not suitable places for kids to grow up. This ultimately creates a new generation of children who are at a massive disadvantage compared with their peers within the school. Our numbers from December 2024 say that one in nine schoolchildren in the London boroughs of Newham and Westminster lives in temporary accommodation. Outside London, it is one in 27 in Luton and one in 29 in Birmingham. We are talking about, essentially, one in a class. This is a significant number. In some places, a huge proportion of classes are homeless children. This is nothing short of an emergency, and it directly stems from the lack of affordability. It is absolutely welcome that we are building social and affordable homes. That will be critical, but we cannot just say it is either bricks or benefits. It has to be both, especially in the short term, because of those children who are currently homeless. They will not get out of there and find a secure, decent and genuinely affordable home without that support.

The number of older people facing homelessness is rising as well. We have seen a 35% rise in the number of older people facing homelessness in the last five years. Similar to the experience of children, the experience of being homeless for older people can be incredibly challenging. We spoke to a lady in her 70s who was in a homeless hostel for three months. She could not access the shower because it was not accessible for her needs. She was dealing with damp and mould in that accommodation. She was relying on family members, breaking the terms of the accommodation because no guests or visitors were allowed, to help her get out of the building because there was no suitable access for her. We are seeing that rising crisis with older people as well.

I want to pick up with Hannah and Charlie on the damp issue. We had a change of the law with Awaab’s Law. He was the little boy who sadly died in a damp property. Have we seen any improvement since its introduction?

We have seen a lot of words and a lot of change in attitude towards recognising that damp and mould is a serious issue, but part of the challenge is that Awaab’s Law is about dealing with serious threats to health, essentially, of which damp and mould is a significant part but not the only part. There is also fire safety and preventing falls from windows. We have seen a number of high-profile cases of children falling to their deaths from high windows. The challenge is that the Government are saying that they will have a delayed implementation of some of those standards, rolling them out slowly, because social landlords are a bit concerned about the impact of those regulations on their ability to build and so on. Our challenge back is that these are fundamentally basic safety standards that need to be met and that Awaab’s Law is about the timeframe within which you must fix those safety standards. Those safety hazards are pretty critical, which is why it is so critical. Yes, we are seeing an increase in rhetoric and recognition of this as a major challenge, but we do not have any data that says that this is getting significantly better. We have to recognise that the worst homes and the worst conditions are in the private rented sector rather than, say, the social housing sector, and those laws do not yet apply in that sector. A secondary risk is that if you put so many new requirements on landlords, they might raise the rent for those tenants, which then leads to people becoming homeless. This is a challenging environment, but for too long no one has even been talking about this consideration. It is good to see that spirit. It is absolutely unacceptable that it took the death of children to make it a reality.

I have some statistics with me. In the private rented sector, 357,000 households with children are living in damp housing. When we talk to families of children who are experiencing damp, they have such a fear of raising it with their private landlord, not necessarily because they will be evicted but, if they make a fuss, their lease will not be renewed and then they will have to move. The power differential means that low-income tenants will do little about damp problems.

As a private renter myself, I experienced trying to get a landlord to act on mould and damp in my last property. You are constantly aware at the moment that section 21 no-fault evictions are available to them. How much do you want to demand that they fulfil their obligations? After the changes in the Renters’ Rights Bill, there will still be the risk that the rent could be raised. Those unchecked rents are a real problem. I will add one thing about how this is implemented. The Renters’ Rights Bill will introduce a decent homes standard and Awaab’s Law, which is welcome. There was some talk about how there needs to be a different system for private renters. We reject that because it should be based on the needs of those families. Mould and damp impacts children and adults in exactly the same way. It impacts in exactly the same way where it is severe and where it is a category 1 hazard. It is likely to cause health harm if prolonged exposure happens over the course of a year. A private landlord should not feel that they do not have to fulfil those responsibilities as quickly as a social landlord when it has exactly the same effect on their tenants, whom they are making money from and for whom they have an obligation to deal with it.

I have a last question. Hilary, you have already put together a few additional areas of housing that we could look at other than the Local Housing Allowance rate being increased. I will ask the rest of the panel. What actions related to housing do you hope to see published in the child poverty strategy?

First and foremost, abolish the benefit cap. The LHA cap is much lower and disproportionately affects larger families who are already in the deepest levels of poverty. Ultimately, it is about poverty depth. The benefit cap tends to push families who are in poverty even deeper into poverty and causes quite extreme levels of hardship. It can also contribute to homelessness. Increasing Local Housing Allowance does nothing for people affected by the benefit cap. Ultimately, the two have to go hand in hand.

A recommendation here is that the Government should commit to an annual uprating of Local Housing Allowance so that it retains its value at the 30th percentile of rents. That is not my recommendation, although Generation Rent does support it. It was the recommendation of this Committee last year, more specifically when this Committee was chaired by the current responsible Minister. I suggest that this Committee could ask the Minister what has changed now that the Local Housing Allowance is being frozen again for this year, because that would make a clear difference. It might become relevant for MPs in another way. I was doing a bit of digging around about whose home is being paid for. It is quite right that those MPs who have constituencies outside London potentially have a second home available to you in London. The independent Parliamentary Standards Authority says that MPs’ second homes are not a luxury or a perk but are necessary. I agree with that, but I am sure you would agree that the homes of those receiving Local Housing Allowance are not a luxury or a perk. They are necessary as well. With that in mind, the MP accommodation budget for 2022-23, the most recent data online, was £25,080 for renting in London. To make the comparison, the Local Housing Allowance rate for a one-bedroom flat in central London at that time would have been £15,365. If you could put it in your own context of the necessary housing that you have to have in central London, you would be forking out an extra £10,000 to achieve what IPSA thinks is the appropriate budget. Forgive me for taking this too far. Pegging Local Housing Allowance to what IPSA says is the second home budget for MPs might be a way to bring into stark relief, every year, or even every month, the idea of what people on Local Housing Allowance have to compete with when they enter the housing market.

What recommendations would we like to see? The first is vision. We need an actual commitment to ending homelessness, and particularly ending child homelessness. That is critical. Unless you have that vision, you will not achieve anything. If you focus just on 1.5 million homes over the course of a Parliament, you will not focus on the homes that are genuinely affordable for people and you will not focus on ending homelessness. The second point is that 90,000 social rented homes a year for 10 years is enough to end homelessness and house most of the 1.3 million people on social housing waiting lists. It will help create a housing system that is fairer. Third, unfreeze Local Housing Allowance. We have all said it. Everyone says that will be critical. Next, abolish the benefit cap. This is, clearly, leaving families in very serious situations, and it particularly affects women and even domestic abuse survivors. We absolutely need to address this from an equalities angle, as well as anything else. One final point is that we welcome the massive increase to social and affordable housing in the spending review, as I have said previously, but measures there will also raise rents for social tenants, which means that while most tenants’ rent increase will be covered by housing benefit, a proportion of people will not be supported. A third of tenants do not claim housing benefit, and some people are affected by both the bedroom tax and the benefit cap, which will create a major challenge for them if those are not abolished at the next autumn Budget.

Thank you. In the interests of time, could we get a written response to the next question?

To be fair, it has been responded to, so I will move on.

I will be brief. I was going to ask you about the consequences and impact of temporary accommodation on claimants, particularly children, but the panel has covered that quite extensively. I certainly recognise the points that have been raised. If I can move on quickly to the ending of silo working, which is a big area that I focus on. Public authorities and Government agencies often work in silos, and we have to break that down. Does more need to be done to end silo working? For example, can DWP and local authorities work more coherently to ensure that policy and practice help to prevent homelessness?

An example of that in the DWP remit is around the housing benefit and pension credit merger that has been proposed, which we think is potentially welcome. It has an ability to reduce the complexity and the disconnect between those two aspects of the social security system. We often see that people make an application for one benefit, pension credit, and theoretically that should trigger an application for housing benefit. In practice, it does not always work that way. In fact, it rarely works in that way. The potential of bringing those two benefits together to reduce complexity and increase consistency is significant, providing that it does not make anyone worse off than they are at the moment and does not affect eligibility or entitlement. We could make the system work a lot better and more simply for claimants in that area.

I am conscious that one of our members has a question in the Chamber at 11.30. If you could briefly respond to Frank, we will come back to you if you do not conclude everything. Give us a couple of sentences and then I will hand over to John.

Broadly, the child property strategy is welcome because it is UK-wide and appears to be cross-departmental. It is a real opportunity to co-ordinate the work of Departments to address children’s housing issues, whether it is with DWP or with Housing, Communities and Local Government.

In broad terms, the Labour Government’s milestones include: more money in your pocket; decent, affordable homes in your area; and every child having the opportunity to succeed. At the moment, we are failing on all those levels when we think about people privately renting, and specifically people receiving Local Housing Allowance to privately rent. Those areas being more joined up to address the problems that people face would be welcome.

Briefly, it is that vision point that I was talking about. It is the same thing. Housing is at the centre of most of our social problems, whether it is health, education, wellbeing and so on. It is critical that all Government Departments take that same view. On the ground it is important that you have joined-up services that support one another, whether it is the NHS or housing support services. They need to talk to one another on the ground to make sure that people get the support they need to access and sustain a tenancy.

We have been losing more homes for social rent than we have been building ever since the 1980s, and it has now reached critical levels and is arguably having a knock-on impact on all kinds of other benefits. In that context, how effectively do social and supported housing providers assist claimants to live independently and to improve their employment and health outcomes?

If we look at a comparison between the experiences of older people who rent privately and those living in general-needs social housing or housing with some form of support, the difference is night and day. Social housing providers are not perfect, but the system is much more suitable on obvious points like affordability, security and the amount of specific support that is tied to the accommodation, or wider things like access to community centres and digital inclusion services, which social housing providers can provide. When it comes to things like repairs and improvements, social housing providers can do so much more because of the nature and structure of their services that even the best-willed private landlord will struggle to do. Overall, the social housing sector is so much more suitable for older people. We look forward to the housing strategy having a focus on older people and how the drive for 1.5 million homes can specifically look at the need for more social housing and the need specifically for housing that meets the needs of an ageing population.

For families with children, the real value-add of the social rented sector is security of tenure. It means that families can put down roots. They know that they can stay there for a long time. They are not constantly worrying about their rent going up and not being able to pay the rent. They are able to tell their landlord that something needs to be fixed. None of those things is available to families in the private rented sector if they are on a low income.

In simple terms, I am a private renter. I often describe myself as a self-loathing private renter because, like most people, I would rather not be privately renting. We are talking about people on Local Housing Allowance, who are not allowed to have a large amount of savings. We can rule out the idea of escaping private renting into home ownership, but the only other two ways out are to find yourself in temporary accommodation and homeless—the worst possible outcome—or, secondly, to access social housing. That is why we are keen because most people do not want to be in private renting and, as we have discussed, it is not the best place for most people to be. Having as many social homes as possible to alleviate the risks for people would be brilliant.

Briefly, tenancy-related support services and supported housing are critical parts of the puzzle of how you deliver the types of homes. That sector has a bit of a funding crisis at the moment. We have argued that housing-related support needs long-term and increased funding, starting at £1.6 billion. A full assessment of need is needed for that. It is critical that we make sure that sector is supported and delivers for the people who need it. Things like Housing First and so on are critical for helping people get out of rough sleeping and into permanent, secure housing.

Thank you for your succinct answers. You have enabled me to be in two places at once.

In the long term, it is no problem at all if landlords want to leave the market. We certainly do not want to twist arms to keep landlords who do not want to be letting in the market. It is not a problem in the long term because the bricks and mortar of those homes do not sink into the ground. They will hopefully be available for first-time buyers, for example. They could also be bought by another landlord who will continue to rent it out. In the short term, the problem is that it often causes evictions, because most landlords do not sell with tenants in situ. We are keen that the Bill passes as soon as possible to end section 21 no-fault evictions and to make sure that we have the right protections in place so that evictions are legitimate if they happen. There will still be a way to evict for sale, but the notice period will be four months as opposed to two months at the moment, which gives tenants more time to find another place. This is in England only. Wales has an eviction notice period of six months, which could be considered. Also, relocation relief would be useful. This is the idea that if a no-fault eviction is still used after the Renters’ Rights Bill, the final two months of rent would be waived by the landlord.

I touched on that earlier, so I jumped the gun a bit. As I say, in principle, it could make a lot of difference by reducing complexity and improving consistency. I did not mention that it could potentially improve the take-up of those benefits. We know that at the moment pension credit is claimed by only about two thirds of potential claimants, and housing benefit by just over four in five potential claimants. Anything that merger could do to help and support an increase in take-up so that older people get the benefits they are entitled to could make a huge difference. We are looking forward to more consultation with DWP on the potential merger of those two benefits, but one key thing that we will be looking for is making it easier to access and claim with a view to making sure that people get the entitlements that they are eligible for.

Thank you. That concludes our session with the second panel. Thank you so much, all of you, for giving your evidence.