North East landlords are calling on the Government to unfreeze the Local Housing Allowance and restore the link between benefits and costs.
The move follows analysis of official data which showed that almost 70 per cent of North East private tenants who rely on Universal Credit to pay their rent have a shortfall between the amount they receive and what they have to pay.
Nationally the average shortfall between benefit and rent is £100 a month.
The Local Housing Allowance is used to calculate the amount tenants can receive to support housing costs as part of a Universal Credit payment. In response to the pandemic the Government increased the Allowance in April 2020 so that it covered the bottom 30 per cent of private rents in any given area. In April last year the rate was frozen in cash terms and it remains frozen.
As a result the link between local rent levels and the amount of housing benefit support received has been broken, said the National Residential Landlords Association. This means the number of North East properties that private renters in receipt of Universal Credit can afford will steadily decline. This is despite rents across the region increasing by far less than the rate of inflation.
‘The benefits system is failing to provide renters and landlords across the North East with the security they need, said NRLA North East spokesperson John Forth.
‘It cannot be right that housing benefit support fails to reflect the reality of current rent levels. The freeze merely exacerbates the already serious cost of living crisis for tenants across the region.
‘The Chancellor needs to listen and respond to the concerns of both renters and landlords by unfreezing housing benefits as a matter of urgency’.