The National Residential Landlords Association (NRLA) has highlighted a critical issue affecting nearly a million private rental households in Britain that rely on Universal Credit, revealing a significant gap between the housing benefit received and the actual rent paid. With 1.5 million private households dependent on Universal Credit for housing costs, known as the Local Housing Allowance (LHA), the NRLA’s analysis of government figures shows that two-thirds face a monthly shortfall in rent coverage.
From next month, the LHA rate is set to align with the lowest 30% of rents in any given area, ending a freeze initiated in April 2020 that has since caused a disconnect between benefit rates and market rents. The Institute for Fiscal Studies has pointed out that this freeze resulted in a mere 5% of private rental properties being affordable for LHA recipients. Moreover, the Institute for Public Policy Research has indicated that over 800,000 households will still struggle with rent shortfalls even after the LHA rate adjustment, a situation expected to deteriorate with another freeze post-April.
In light of the upcoming Budget, the NRLA urges a commitment from all political parties to stabilize housing benefit rates in line with at least the bottom 30% of market rents for the duration of the next Parliament. This appeal aims to alleviate the financial uncertainty and distress experienced by renters and landlords due to fluctuating and inadequate housing support.
Ben Beadle, Chief Executive of the NRLA, emphasised the need for a lasting solution, stating, “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 further argued for a policy ensuring that housing benefit rates consistently reflect actual rent levels, criticising the current system’s failure to match the financial support provided with the real costs faced by renters.
