The government is slashing housing benefits by hundreds of millions of pounds a year – in a blow for some of the lowest-income households.
Low-paid tenants will no longer see their housing benefits rise next year, according to changes confirmed in the Spending Review small print.
The move comes despite the Treasury raising Local Housing Allowance (LHA) rates in the summer to help renters through the coronavirus pandemic.
Currently, the LHA allows private renters to claim support on 30% of the cheapest homes in their area.
The amount payable was newly set in April to help tenants whose incomes had been adversely affected by the pandemic.
However from next April, the rate will be frozen, meaning the amount tenants can claim will not rise each year.
The report predicts that the current £1billion cost of the measure will decline to just £345million by 2025-26.
The Office for Budget Responsibilty, the Government's financial watchdog, experts, confirmed the plans in a report published alongside the Spending Review.
In it, experts revealed they had assumed LHA rates would rise with inflation every year.
But they said the Government "has now decided that rates will be frozen in cash terms from 2021-22 onwards.
Get the latest money advice, news and help straight to your inbox - sign up at mirror.co.uk/email
“This means the £1 billion cost of the measure in 2020-21 declines to £0.3 billion by 2025-26 (and that LHA rates will fall back below the 30th percentile of local rents over time).”
The National Residents Landlords Association (NRLA) accused the government of turning its back on renters.
Ben Beadle, chief executive of the NRLA, said: “Many renters and landlords are struggling with the consequence of rent arrears through no fault of their own yet the Government is failing to take the action needed to address this.
“Whilst the Chancellor has spoken about the need to support those who find themselves homeless, it would be much better for all concerned to provide the funds needed to sustain tenancies in the first place.”
