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Private renters on benefits face £100 a month shortfall

Paloma Kubiak
Written By:
Paloma Kubiak

More than half of private renters in receipt of Universal Credit to pay their rent say they have a shortfall between the amount received and what they actually pay for housing.

Data revealed that 56% of private renters relying on Universal Credit have an average gap of £100 a month between the amount they receive and their total rent costs.

According to the National Residential Landlords Association (NRLA), almost 60% of renters with two children rely on Universal Credit to help pay their rent but report a monthly shortfall.

Regionally this varies from 40% in London to 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 April 2020 amid the pandemic, the allowance was lifted so that it covered the bottom 30% of private rents in any given area.

But in April last year the rate was frozen in cash terms as the housing benefit was no longer linked to current rents.

According to NRLA, this means the number of properties that private renters in receipt of Universal Credit can afford will steadily decline.

As such, it 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.”

A Department for Work and Pensions (DWP) spokesperson, said: “As part of this government’s unprecedented package of support for renters in the pandemic, we increased Local Housing Allowance rates to the 30th percentile in April 2020. This was significantly beyond increases due to inflation, boosting support by almost £1bn and benefiting around 1.5 million households by £600 on average over the year.

“We have since maintained rates at the same cash level, meaning that everyone who benefited from the increase will continue to do so and support for private renters is still higher than it was before the pandemic.”