Propertymark has renewed its call for Local Housing Allowance  – which has remained static since 2020 – to be increased.

It says the current freeze is causing many people on benefits to be completely priced out of the rental market.

The trade body says several MPs share its view but they have not, as yet, persuaded the government to act.

A statement from Propertymark says: “We have long called for Local Housing Allowance to be set to at least the 30th percentile, if not the 50th percentile and topped up annually to keep up with market rents. We most recently included this as one of the key points in our Spring Budget representation to HM Treasury.”

New research undertaken by the Bevan Foundation has found that only 1.2 per cent of properties that were advertised for rent between 3 February 2023 and 17 February 2023 in Wales were available at or below Local Housing Rates.  

In total there were only 32 properties advertised on the market that were fully covered by Local Housing Allowance rates, with no properties at all being on the market at Local Housing Allowance rates in 16 of Wales’s 22 local authorities.

However Propertymark says this problem is across the entire UK with recent research by housing charity Crisis and Zoopla showing that just 11 per cent of one-bedroom properties in England are affordable on Local Housing Allowance, down from 17 per cent in April 2022. 

The proportion of affordable two-bedroom properties has fallen to just seven per cent from 11 per cent, and for three-beds now stands at six per cent, down from 10 per cent. 

“As part of Propertymark’s wider lobbying and stakeholder work, we have been encouraging member agents to submit their rental data to the Valuation Office Agency to improve rental data to reflect fair Local Housing Allowance rates” it adds.

In detail it says it wants government to ensure LHA rates are set correctly is the scope of Broad Rental Market Areas (BRMAs). BRMA’s are used to decide Local Housing Allowance levels, and theoretically should determine where a person could be expected to live, considering access to facilities and services. 

However, they sometimes include two local authority areas which means they do not always correctly reflect the market rate.

Propertymark states: “We believe the UK Government must focus on reassessing the size of BRMAs to provide a better representation of the local rental market. Local Housing Allowance and BRMA’s are policy areas reserved to the UK Government and are not devolved to the other home nations.”