Data shows that almost 60% of renters with two children relying on Universal Credit to help pay their rent have a shortfall between their rent and the benefits they receive. Regionally, the proportion of tenants affected ranged from just over 40% in London (although based on a much higher number of claimants) to over 68% in Wales.
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 lifted it in April 2020 so that it covered the bottom 30% of private rents in any given area. In April last year, the rate was frozen in cash terms.
As a result of the freeze, housing benefit support is no longer linked to current rents. It means the number of properties that private renters in receipt of Universal Credit can afford will steadily decline.
New data has also suggested that 53% of adults who rent their homes reported that they could not afford an unexpected expense. This is happening despite private rents across the UK have increased by far less than inflation.
The NRLA is calling on the Government to unfreeze the Local Housing Allowance to cover average rent.
Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “It is simply absurd that housing benefit support fails to reflect the reality of rents as they currently stand. All the freeze is doing is exacerbating the already serious cost of living crisis.
“The Chancellor needs to listen and respond to the concerns of both renters and landlords and unfreeze housing benefits as a matter of urgency.”
