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Impact of LHA on Supported and Sheltered Accommodation

This article explores the changes in Local Housing Allowance (LHA) affecting tenants in Supported and Sheltered Accommodation, discussing the current system, the implications of LHA, and the future uncertainties. It highlights the potential financial challenges faced by housing providers and the need for sustainable solutions.

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Impact of LHA on Supported and Sheltered Accommodation

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  1. Impact of LHA on Supported and Sheltered Accommodation

  2. What is Changing and When • All new tenants in Supported and Sheltered Accommodation who sign up after April 2017 will be affected by Local Housing Allowance from April 2018 • This changes in the way local authorities calculate Maximum Housing Benefit • Maximum benefit award now based solely on postcode and required property size

  3. Current System - Housing Benefit • No restriction on amount of Housing Benefit paid for a property provided local authority agree it is appropriate. • Rent and applicable service charges are added together and used to calculate maximum Housing Benefit. • Currently this ensures that properties with large service charges are covered by Housing Benefit

  4. Local Housing Allowance • Maximum allowable Benefit assessed by taking a snapshot of all rented property within an area. • Maximum rent is then set at the 30th percentile of those figures • Service Charges are ignored entirely • As a result the LHA rate is always set below the average for the area

  5. KHT Impact Assessment • 1041 KHT properties above LHA maximum • Represents 8.01% of our total housing stock • Disproportionately affecting the following groups • Sheltered - 156 (45.5% of stock) • Bungalows – 58 (39.6% of stock) • Supported – 100 (100% of stock)

  6. Crawford Gardens • Average gross rent at Crawford Gardens is £136.56 per week • Average LHA for Crawford Gardens is £96.11 per week • Difference of £40.45 per week per property between gross rent and maximum LHA • Worst case scenario is a potential shortfall of £2103.40 per week or £109,376.80 per year for Crawford Gardens alone • Clearly an unsustainable position

  7. The Future • Place shapers estimated a total Income loss across supported accommodation in the sector of £400 million • DHP budgets will not be able to fill this gap • Many projects mothballed whilst waiting for further information. • NHF have issued a consultation on future funding for Supported Accommodation • Government funding review due to be published in the next few months – hopefully clarifying the picture.

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