Private Housing Renters Central Housing Group

Housing Benefit Leaves 1 million Private Housing Renters Struggling

One million private housing renters who depend on Universal Credit are unable to cover their rent with the housing benefit they receive, the National Residential Landlords Association (NRLA) reveals.

It has analysed government data and found that two-thirds of the 1.5 million private housing renters in Britain and receiving Universal Credit have a shortfall between their Local Housing Allowance (LHA) payment and their monthly rents.

The LHA is the housing benefit component of Universal Credit, which is supposed to cover the lowest 30% of rents in any given area.

However, since April 2020, the LHA rate has been frozen, resulting in a disconnect between benefit rates and market rents.

‘Fix the broken housing benefit system once and for all’
The NRLA’s chief executive, Ben Beadle, said: “It is time to fix the broken housing benefit system once and for all.

“The repeated freezes of the support available and the lack of clarity about rates in the future is causing insecurity and anxiety for renters and landlords alike.

“It is making it impossible for anyone to plan for the future.”

He adds: “All parties need to commit to ensuring housing benefit rates permanently track average rents.

“This would end the bizarre and morally absurd spectacle of the support available being completely detached from the cost of housing for renters.”

Only 5% of private rental properties are affordable
The Institute for Fiscal Studies estimates that only 5% of private rental properties are affordable for those relying on the LHA.

And the Institute for Public Policy Research warns that even after the LHA rate is unfrozen in April, more than 800,000 households on Universal Credit will still face shortfalls between their housing support payment and the rents they pay.

The situation is expected to deteriorate further as the LHA rate is due to be frozen again after April, meaning that the benefit rates will fall behind rent levels once more.

The NRLA is urging all parties to provide certainty to renters and responsible landlords by ensuring housing benefit rates remain pegged to at least the lowest 30% of rents throughout the next Parliament.

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