Housing Costs: Government Support

Andrew George Excerpts

Wednesday 21st October 2026 Westminster Hall

[Emma Lewell (in the Chair)]

I will call Andrew George to move the motion, and the Minister to respond. I remind other Members that they may make a speech only with prior permission from the Member in charge of the debate and from the Minister. As is the convention in 30-minute debates, the Member in charge will not have an opportunity to wind up.

[Andrew George (St Ives) (LD)]

I beg to move,

That this House has considered Government support for housing costs.

I am delighted to have the opportunity to raise the issue of Government support for housing costs—in other words, local housing allowance and the way that it is part of universal credit and the calculations made therein. The hon. Member for North East Hertfordshire (Chris Hinchliff) has let me and the Minister know that he would like to make a short speech, and I understand that others wish to make interventions.

This is not the first time that I have raised this issue. I was looking back at the records, and I even had a debate in this Chamber on a related matter on 9 November 2010—if anyone wishes to check the records. I will start on a sombre note and give a couple of examples from my constituency of recent casework where I have met constituents who have had difficulties with their benefits. One constituent has a history of undiagnosed neurodiversity and mental health problems and struggles to hold down regular employment, although he is quite capable. He has been rejected for personal independence payment and receives approximately £900 a month in universal credit, but must pay what is pretty much the average for his private rent in the constituency, which is £850 a month. That leaves him with £50 to live on for the whole month—to cover all his bills, feed himself, travel and do everything else. That makes the point about the difficulties and the poverty trap in which people find themselves.

A mother and three children have been benefit-capped, despite the mother paying almost £1,200 a month in rent out of the approximately £1,500 a month she receives in universal credit. She is in debt to her utility providers and cannot afford to work because of the high cost of childcare. Those are just two examples of what it means to families to have to live on the current rates of local housing allowance.

[Perran Moon (Camborne and Redruth) (Ind)]

Does the hon. Member agree that there needs to be much better understanding of housing affordability in places such as Cornwall? The issue is that where the benefits system does not recognise the cost of housing, those people who most desperately need support are most disadvantaged, compared with those in areas where housing affordability is much greater.

[Andrew George]

Indeed. I thank the hon. Member, my constituency neighbour, for those remarks. Certainly, the Minister will be aware, because he understands these matters very well, that in places of particularly high housing costs—places such as Cornwall, but not just Cornwall—where scarcity of private rented accommodation makes it difficult for local families to find anything affordable, the gap between local housing allowance and the actual rent levels is particularly stark.

[Victoria Collins (Harpenden and Berkhamsted) (LD)]

I thank my hon. Friend so much for securing this debate. I have the example of Annette, who is in her 70s and cares for her son. She has been forced to move twice when landlords have sold up, and she fears that she cannot afford the next rise. My hon. Friend talks about the costs. Citizens Advice locally highlights the fact that the frozen local housing allowance is now 20% to 25% lower than local rents, and record levels of people are at risk of homelessness. Does he agree that that reiterates the case? The Government must look at unfreezing local housing allowance and linking it to local rent?

[Andrew George]

My hon. Friend anticipates what I shall go on to say. One of my main messages concerns the impact of the 2024 housing allowance freeze; the Government will not be surprised by that—I gave the Minister advance notice of my questions. The allowance is supposed to be set at the 30th percentile—in other words, 30% of properties available on the market should be below the housing allowance. However, certainly in places like Cornwall, we are talking about it being the minus-30th percentile, effectively, because in areas like mine the local housing allowance is 30% below the lowest-cost available rental property in the marketplace. The 30% is relevant, but sadly not in the way that is required.

[Carla Denyer (Bristol Central) (Green)]

I thank the hon. Member for his important speech. In my constituency, only 2.3% of rental homes are affordable with local housing allowance—a far cry from the 30% that it is meant to be. Of course, that means that many more families, including families with children, are forced into rent arrears, poverty and homelessness. According to the Joseph Rowntree Foundation, introducing rent controls would reduce the cost of unfreezing local housing allowance by more than £1 billion by 2030. Does the hon. Member therefore agree that the Chancellor should introduce an emergency brake on rents as well as unfreeze local housing allowance at the Budget to address the gross distortion, inequality and unfairness in the housing market?

[Andrew George]

The hon. Lady makes a very good point. I will come to the extremely difficult decisions that any Government need to make about how this policy adds up with the available resource. Certainly, if one wants to avoid driving private landlords out of the market altogether, one has to form an understanding of how the market works. I entirely agree with the principle of what the hon. Lady is saying, and I will come to how we can how we can pay for these things. That is a very difficult question, which Opposition politicians generally avoid, instead asking for more money, while not necessarily explaining where they will get it from.

My primary message is that current Government policy is not working. It is driving the poorest into debt, food banks, homelessness and, in many cases, sadly, destitution. I have a number of questions for the Minister, which I sent to him in advance. If the Government know that a person’s private rental is bound to be at least x, why in my area of Kernow West, when the Valuation Office Agency assesses these factors, is the benefit level set at x minus 30% to 40%? That leaves people in the kind of poverty I described in the two cases I mentioned earlier. Have the Government reviewed the adequacy of the present methodology for LHA calculations, and are Ministers confident that the present arrangements do not risk tipping families and individuals in areas of high-priced private rental accommodation into rent arrears and potential destitution?

I understand that the Valuation Office Agency collects the rental data from landlords to determine the LHA, but how accurate and up to date is that data? Is the VOA using historical cases, where people have been living in accommodation for a very long time, and where the data would not reflect the price of that accommodation were it to come back on to the market? The Government need to answer many questions about this issue. I know the Minister is sympathetic.

One example was raised with me by Citizens Advice Cornwall. A family in Penzance consisting of either a couple or a single parent with two children of different sexes, one of whom is 10, meaning the children need separate bedrooms, would technically require a three-bedroomed house. Local housing allowance states that they can have a maximum of £812.76 per month. According to Rightmove last night, the lowest price for a privately rented three-bedroomed house in the Penzance area, a few miles away in Marazion, is £1,800, making a gap of £987.24 per month for that family. I could go through a large number of cases, but I do not have time now.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

I want to make an important but related point. Emergency and temporary accommodation in Cornwall is also extremely expensive because of the seasonal nature of things, and particularly because of the holiday let industry. That adds to the burden on councils and tenants.

[Andrew George]

I am grateful to the hon. Lady from the next neighbouring constituency for raising that issue.

I was going to make the point that although there were over 1,700 Airbnbs available in my constituency last night—and that is just Airbnbs, not all holiday lets—there were zero private rental properties available within the LHA rates when we checked on how the market is operating. I will come on to how we will pay for any kind of increase, but the reason why I compare those properties with holiday lets is that for the last 10, 12 or 13 years, we have been paying out multibillions to second home owners through small business rate relief and other tax loopholes that are available to people with second properties. Local people do not get any small business rate relief. The people with second properties who do not let them to local people, and flip from paying council tax to business rates, are able to apply for small business rate relief and pay nothing at all. In Cornwall alone, that has cost over half a billion pounds in the last decade.

If the Government want to invest in desperately needed homes for local people, they may well incentivise private landlords by providing tax concessions to those who provide decent homes with security and an agreed, negotiated rent cap to bring it within the scope of what is affordable. That would be a far better way of spending the Government’s resources.

I urge the Minister to look carefully at the issues I have raised. I urge him to look at ending the freeze of local housing allowance rates, to restore and maintain the link between local housing allowance and the 30th percentile of the local market, to commit to an annual LHA uprating, to introduce measures to mitigate the impact of the benefit cap, and to continue wider housing reforms, such as, as the Government want to, delivering more social housing. I hope he will consider those matters, but now I want to give time for others to speak.

--- Later in debate ---

[The Minister for Social Security and Disability (Sir Stephen Timms)]

I am delighted to be serving under your chairmanship, Ms Lewell. I congratulate the hon. Member for St Ives (Andrew George) on securing this timely debate just the week before the Budget.

Stable, affordable, good-quality housing is fundamental to individual wellbeing, economic stability and public health. That is why the Government have set out, as Members know, the ambition to deliver 1.5 million homes. We are supporting that with a record £39 billion investment in social and affordable homes. That is the programme that my hon. Friend the Member for North East Hertfordshire (Chris Hinchliff) referred to. We are also supporting that with our £16 billion national housing bank.

Securing an adequate number of decent affordable homes is our priority. People have wanted to do that for a long time. We are making sure that the investment is going in to deliver those homes. It is true that delivery will not happen overnight, but delivery is going to happen. We inherited a very serious housing crisis, and we acted quickly in response. Policies in place are having an impact already. There are over 400,000 new homes in England since the start of this Parliament, more than a quarter of the target. New build starts in the year to June were up 15% on last year.

We are driving forward big reforms of the planning system. In August, we announced a new planning policy framework with clearer rules-based policies to unlock more homes where they are needed. We are investing in construction skills. My Department spent nearly £38 billion last year supporting renters with housing costs via universal credit and housing benefit. That is an increase of around £3.5 billion over the last decade. No other OECD country spends a greater proportion of its GDP on housing support than we do.

I recognise the picture that hon. Members have set out of the impact of local housing allowance in their local areas. Rental inflation across the country varies according to specific challenges in each area. The local housing allowance determines the maximum financial support for renters in the private rented sector. Households in similar circumstances living in the same area are entitled to the same maximum rent allowance, regardless of the rent that they are required to pay.

Local housing allowance was never intended to cover all rents in all areas. The rates for that are set annually by the Secretary of State for Work and Pensions. Future decisions will be based on the Government’s priorities, and those are the priorities that the Chancellor will have in mind as he makes his announcements in the Budget next week.

The Government provide additional discretionary housing support to local authorities to help tenants to meet shortfalls in their rent costs. In England, that is through the crisis and resilience fund housing payment. I wonder whether, in some of the cases that the hon. Member for St Ives referred to, his constituents would find it worth their while to contact the local council to see whether they could benefit from a discretionary housing payment. The crisis and resilience fund includes support for preventive wraparound help, as well as assistance for people facing a financial crisis. I know that local authorities are increasingly looking at what they can do with those resources to protect people in the kinds of situations that the hon. Member for St Ives describes.

Local housing allowance rates are set within broad rental market areas determined by rent officers in the valuation office across England. There are 192 broad rental market areas across Great Britain. As the hon. Member for St Ives said, Kernow West is the one that includes St Ives. A BRMA is an area within which a person could reasonably be expected to live, having regard to facilities and services for the purposes of health, education, recreation, banking and shopping, taking account of the needs of travel to and from those services by both public and private transport.

Across each BRMA, rent officers gather a representative sample of private rental data of all property types and sizes from a range of sources, including both new and existing tenancies. They survey rents across the full year to capture current market conditions. That includes collecting a representative sample from all the local authority areas within a BRMA, including any larger urban centres and more sparsely populated rural areas in that BRMA.

Perhaps the hon. Member for St Ives might find it useful to have a conversation with the Valuation Office Agency, because he raised perfectly understandable concerns about whether the data it uses is out of date. The process is designed to ensure that that is not the case and that up-to-date data is provided. Of course, it was only just over two years ago that the local housing allowance was uprated to the 30th percentile of the levels of rents in each BRMA.

[Andrew George]

A moment ago, the Minister said that it is not intended that the LHA should cover all rents in all areas, and he encourages me to talk to the local valuation office about its methodology in setting the LHA for my area of Kernow West. I will happily do that, but looking at the marketplace last night, there was not a single property anywhere close to reaching the LHA level. Is it not the Minister who should be undertaking a review of whether the valuation office is up to the task of understanding how the market is working, rather than leaving it to local Members of Parliament?

[Sir Stephen Timms]

The hon. Gentleman reproves me in a very appropriate way. My point is that I think the LHA methodology, which he queried, is sound. When local housing allowance rates are increased, they are implemented in April, based on the latest private lettings data for the 12-month period up to the end of September the preceding year. I do not think there is a problem with the way the LHA rates are calculated—in 2024, all the LHAs were uprated to the 30th percentile of rates in each BMRA—but there have been significant rent rises, even in the two and a bit years since the level was last reset. That, I think, is the phenomenon to which the hon. Gentleman is drawing the House’s attention. There has been a rapid rise in rents in that period, and that will need to be taken into account in deciding what should happen to the LHA for next year.

Tackling homelessness is a very high priority for the Government, as the Prime Minister underlined when he took office. The LHA supports those on low incomes with their rents in the private sector, but the causes of homelessness are complex, and the LHA is only one measure to tackle it. We have significant funding targeted more specifically at those who are homeless and those at risk of being homeless, as those in the kind of situation that the hon. Member for St Ives described sometimes are. Sustained cross-Government action to tackle the causes of homelessness is being taken forward through the national plan to end homelessness. We will provide more than £4 billion in funding for homelessness and rough sleeping services from 2026-27 to 2028-29.

Councils have £2.7 billion through the homelessness, rough sleeping and domestic abuse grant, which they can use to support people at risk of and experiencing homelessness and rough sleeping, including funding for delivery of support on domestic abuse safe accommodation. That all means that councils can do more to prevent homelessness, reduce reliance on the expensive temporary accommodation that my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham) drew attention to and target resources where they are needed.

[Andrew George]

The Minister mentioned earlier that we will await the Chancellor’s announcements in the Budget next week. It sounds as if the Minister himself is awaiting those announcements. I wonder to what extent he is putting pressure on the Chancellor to address these issues and ensure sufficient budget for his Department to address this issue. I am sure the Prime Minister sincerely wants to reduce and entirely remove homelessness from our streets, and I applaud him for that, but I am afraid that the way that the system is working will only add to the problem.

[Sir Stephen Timms]

I think we are all waiting to hear what the Chancellor says next week. I can certainly assure the hon. Member that my colleagues in MHCLG and the Treasury are continually talking about these issues and the right approach. Last time the uprating to the 30th percentile happened—April 2024—the cost over the full spending review period was, if I remember rightly, some £7 billion. If we are looking at effective measures to tackle homelessness, the approaches and specific funding that I have just described to address the problem and the risk of homelessness are the effective ways to do that. Those are the kind of factors that the Chancellor will certainly be bearing in mind as he reaches his decisions for next week.

To further drive the shift from crisis response to prevention, we are setting a national target to increase the proportion of people supported by council homelessness services to stay in their homes or helped to find alternative accommodation. Our new duty to collaborate will require public services to work together to identify people at risk of homelessness and to consider what action they can take within their existing responsibilities to help prevent that.

The Government’s key priority in all this is to secure an adequate number of decent affordable homes. We have announced the new 10-year, £39 billion social and affordable homes programme—the biggest boost to housing grant funding in recent memory. The aim is to maximise supply, with a target to deliver at least 60% of the homes under the programme as social rent. Initial funding allocations via the programme have been confirmed across England, excluding London; 33 providers will receive £9.5 billion to invest in new social and affordable housing and deliver 73,000 homes. Nearly two thirds of the homes built by strategic partners through the programme will be for social rent, and for the first time ever, three councils—Cambridge city council, Eastleigh borough council and Newcastle city council—have been awarded strategic partnership status with Homes England. Councils are increasingly stepping up to meet our bold ambitions.

More than £16 billion in funding for outside of London is still yet to be allocated. In allocating that, the Government intend to prioritise social rent homes, particularly council homes, to achieve the Prime Minister’s ambition for the biggest council house building programme since the post-war boom ended in the early 1980s. Directing funding into that programme and others along those lines is the way to deal properly and permanently with the severe housing crisis that we face right across the country, which the hon. Member for St Ives and others have spoken very powerfully about in this debate.

The new national housing bank was launched on 1 April, backed by up to £16 billion in financial capacity. We envisage that bank leveraging in billions of pounds of private investment to accelerate house building across the country. It is taking quite a pioneering approach to its role, and its status as a publicly owned subsidiary of Homes England, designated as a public financial institution, gives it a lot of autonomy in working out how to do this job most effectively. My colleagues in MHCLG have launched the national housing delivery fund, which includes £5 billion of grant funding to support housing delivery and address viability challenges, including through the remediation of brownfield sites and provision of unlocking infrastructure.

Let me say in the final seconds that my colleagues in MHCLG have taken the view that rent controls would do more harm than good.

Motion lapsed (Standing Order No. 10(6)).