Local housing allowance rates

Local housing allowances for each category of dwelling are set by the rent officer annually after the Consumer Prices Index (CPI) of annual inflation is published in September. From 2014, new rates take effect every 15 January (or the following Tuesday if that day is not a Tuesday). A local housing allowance is the lowest of two figures:

  • the amount of rent at the 30th percentile point of local market rents for assured tenancies in a ‘broad rental market area [1] ’; or
  • the previous year’s local housing allowance rate increased in line with the CPI (from 2014, the rate is instead increased by 1 per cent).

From April 2014 [2], a different method of setting the local housing allowance will apply in some broad rental market areas and category of dwellings. In these cases, the rate will be increased by 4 per cent, subject to a maximum local housing allowance of £258.06 for shared accommodation, £258.06 for one bedroom, £299.34 for two bedrooms, £350.95 for three bedrooms and £412.89 for four bedrooms.

The areas and categories of dwelling which could increase by up to 4% are shown in the table under article 2 The Rent Officers (Housing Benefit and Universal Credit Functions) (Local Housing Allowance Amendments) Order 2013. [3]

  1. A ‘broad rental market area’ is an area where you could reasonably be expected to live, taking into account the facilities and services for health, education, recreation, banking and shopping, and the travel distance by public and private transport. It must contain a variety of kinds of residential accommodation and types of lettings, and have sufficient private rented housing to ensure that the local housing allowance for the categories of dwelling in the area is representative of the rents that a landlord might be reasonably expected to obtain in that area.  ↩
  2. For Universal Credit, the first local housing allowance rates take effect on 29 April 2013.  ↩
  3. The order amends schedule 3B of the Rent Officers (Housing Benefit Functions) Order 1997  ↩