Propertymark has told a group of MPs that many tenants on benefits are excluded from the private rented sector due to the inadequacy of Local Housing Allowance rates.

The trade body was giving evidence to the House of Commons Work and Pensions Committee which has launched an inquiry into benefit levels in the UK to help inform current and future government thinking on the adequacy of tenants on benefits. The MPs are also looking at the relationship between social security and the labour market.

Propertymark says LHA rates have been frozen since 2020 and have not kept up with market rents.

Drawing on research by the Bevan Foundation in Wales and Centrepoint in England, the trade body’s evidence highlighted the glaring gap between LHA levels and market rents and reaffirmed its call that LHA should be pegged at the thirtieth percentile, if not the fiftieth and topped up annually to keep up with market rents.

Propertymark also pointed out that reform of Broad Rental Market Areas could also reflect local areas rental areas more accurately and the important role that letting agents could play in improving the collection of rental data from the Valuation Office Agency.

The VOA collects rental data which feeds into government statistics and insight such as LHA levels. Unfortunately, despite the importance of submitting data, landlords and agents appear reluctant to do so and Propertymark recommends that the committee look to overcome some of the potential barriers.

The industry body also reiterated its concerns over the fact that Universal Credit has got some tenants into debt while waiting for the initial payment from the first five weeks, was completely unacceptable. 

It recommended that the waiting period at the beginning of a claim be reviewed as well as turning UC advances into a grant rather than a loan and direct payment of the housing benefit element of UC should be paid directly to landlords as the default option.  

Given the challenges to young people from the cost-of-living crisis, Propertymark also called for a temporary suspension of the Shared Accommodation Rate, and demonstrated the impact the Benefit Cap was having on large families especially in high rent areas such as London.

Timothy Douglas, head of policy and campaigns, comments: “We have called on the UK government time and time again to end the freeze on LHA rates and improve how Universal Credit operates in order to help its recipients’ ability to obtain good quality and well managed housing.

“We hope the influential Work and Pensions Committee can also add its weight to the issue and force the UK government to address these urgent issues and reengage with stakeholders representing the private rented sector as a priority.”

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