The failure by the main political parties to provide clarity on housing benefit rates is creating yet more uncertainty for many people living and working in the private rented sector, according to National Residential Landlords Association (NRLA).
More than 1.5 million households renting privately in Britain receive Universal Credit with support for their housing costs, known as the Local Housing Allowance (LHA), included. However, an analysis of government data by the NRLA suggests that, of this group, two-thirds (65%) experience a shortfall between their LHA payment and their monthly rent.
In April 2024 the LHA rate was once again pegged to the lowest 30% of rents in any given area. This followed a freeze introduced in April 2020 which had caused benefit rates to be detached from market rents. According to the Institute for Fiscal Studies, this led to just five per cent of private rental properties being affordable for those in receipt of LHA.
Since then, the Institute for Public Policy Research has warned that even with the LHA rate unfrozen, over 800,000 households on Universal Credit will continue to face shortfalls between their housing support payment and the rent they pay. The picture is set to worsen given that LHA rates are due to be frozen from April 2025.
None of the main parties’ manifestos have pledged to permanently link housing benefit rates to the bottom 30 per cent of rents for the duration of the next Parliament. Failing to do so means they have ignored recommendations made by the cross-party Work and Pensions Select Committee, and leaves those living and working in the private rented sector struggling to plan for the future.
Ben Beadle, chief Executive of the NRLA, said: “It is time to fix the broken housing benefit system once and for all. The lack of clarity about support in the future is causing insecurity and anxiety for renters and landlords alike. It undermines efforts to sustain tenancies and prevent homelessness in the first place.
“The lack of any pledges to address this issue by the main parties is unacceptable. The next government must confirm that housing benefit rates will permanently track market rents. This would provide the assurances needed that support would keep pace with the cost of housing.”
Fix the legal side. Agents give 200% . Give most of our time for free.
Solicitors: on lunch
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The problem is a lack of domain knowledge, in government, to resolve the challenges of government assisted rentals. There is then a lack of respect for those who have the knowledge, experience and practical understanding to run a 1.5million property portfolio. In 2012 Clive Betts gave me 3 minutes of his very valuable time to understand the 101 basics of the problem; there are 12 months in a year not 13. 46
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Fixing the housing “benefit” system is easy but beadle needs to understand a few basics first as do government.
1. Build thousands of social houses and flats to relieve the pressure on the PRS.
2. Move high income families out of social housing, reserve it only for low income families and those receiving support.
3. Means test all social housing applicants, refuse anyone that can afford PRS rates using salary alone.
Those 2 actions should then mean that the PRS doesn’t have to support as many on support as they will be housed in social properties with rents in line with benefits!
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