The LHA maxima is wrongly called the LHA cap by too many people in housing who should realise that we already have a policy called the LHA cap – in 2012 the coalition capped LHA at £400 per week and did away with any LHA rates for 5 or 6 or higher bed properties.
The LHA maxima is the policy announced by Osborne in the Autumn Statement which said no social tenant can receive more in housing benefit than the maximum LHA a private tenant can receive – hence the LHA maxima.
More importantly the message of what the LHA maxima does is still not getting through to social landlords and local government who both really should know better. Today, Wednesday 3 February saw the Chief Executive of St Vincent’s Housing Association say this on Twitter:
Follow the link and we see this:
The two red lines are there as (a) these new homes are not ready to take the first sheltered tenants until May 2016 and hence after April and because of this (b) they will ALL be hit by the LHA maxima cut from April 2018.
A 1 bed property with a rent set from £135 in Bury which has a 1 bed LHA maxima rate of ….
£135 per week rent sees housing benefit pay just £84.00 per week of that meaning the sheltered tenant has to find an additional £51 per week just to make the rent – something that will not be too HAPPI about!
Delve a bit deeper onto SVHA’s website and we find that this scheme has 16 number of 1 & 2 bed flats to rent that I presume means 8 of each not 16 of each and the following on rent level which is lower than above and presumably means the HB eligible amount.
SVHA has 8 x 1 beds that will see a HB cut in 2018 from £125.62 to £84.00 and 8 x 2 bed rented flats with a HB cut from £140.62 down to £98.96.
Compute that over a year and in 2018/19 this all singing all dancing state of the art HAPPI complex will have a HB cut of £34,739 per year or £2,172 per year less than when this new scheme was initially developed.
This is a 31.3% reduction in maximum housing benefit.
The scheme is ONLY financially viable IF SVHA only occupy these properties with those over 55 who do NOT receive housing benefit. Or put another way these properties exclude the social housing tenant on benefit that now average at least 75% of all tenants in sheltered housing.
The issue here is that SVHA must have costed this scheme a while back and way before the Chancellor’s out of the blue LHA maxima policy announcement on 25 November 2015 in the Autumn Statement. They are now being shafted by that ill-conceived policy.
I wonder how many other new builds in development have a scheduled completion date after April 2016 as they too will all be in the same boat of being non financially viable.
All similar schemes to this and by any social landlord will not get the go ahead now and we read in the LHA maxima debate last week that Golden Lane Housing (Mencap’s housing arm) has shelved £100 million worth of new build investment because of this policy.
In this SVHA case would it be cheaper to tenant the scheme fully on the morning of 31 March and decant all tenants to a hotel for 5 weeks until the properties are ready?
It that was feasible legally then financially it would be worth it as these tenants would not then face the massive HB cut from April 2018. SVHA could decant them for 5 weeks in Malta and still be better off financially as of course the tenants would be too! Contrived to hell and almost certainly contrivance under HB regulations and hence unlawful.
Could SVHA have their builders work 24 hours a day and get the properties built by 31 March? Being really sarcastic here but given that this government voted down the policy of making homes fit for human habitation could SVHA tenant the properties with no windows or doors or even internal walls on 31 March just so they are existing tenants the day before this policy comes into effect?!
This is just one example of perhaps many hundreds of new build schemes that are already in development and all of them expose the sheer madness of the LHA maxima policy.
The HAPPI standards are what is needed and Housing Ageing Population Panel for Innovation or HAPPI first reported back in 2009 as being greatly needed and THE way forward. So the LHA maxima policy also means that HAPPI homes are probably all non financially viable and the whole concept is dead and buried.
Put another way, this government with one announcement by the chancellor has ensured that older people – the grey vote in political terms too – do not get the homes they need and want all because this Conservative administration is (a) incompetent and (b) hell bent on destroying the social housing model created in the Welfare State of 1948.
That just leaves 2 choices for older people – take the lowest or low level no frills and ‘bog-standard’ sheltered housing with no support and no care provision; or go into a residential care home and cost the (local government) public purse around 5 times as much as a HAPPI home would do!
That begs one simple question – Why the hell aren’t social landlords and local authorities screaming at this Conservative government what a flea-ridden dog’s breakfast this LHA maxima policy is?