Half of private renters reliant on benefits face rent shortfall

Almost half of all private renters in receipt of housing benefits experience a shortfall between the support they receive from government and their monthly rents.

That’s according to a new analysis by the National Residential Landlords Association (NRLA) ahead of a planned freeze of housing benefit rates in April.

The most recent official data reveals how 48 per cent of private tenants in receipt of Local Housing Allowance (LHA) have a shortfall between their allowance and their rents. 

In a letter to Work and Pensions Secretary Liz Kendall MP, the NRLA points to figures from the Institute for Fiscal Studies indicating that the last time LHA rates were frozen in 2023, only five per cent of rental properties were affordable to those  claimants in receipt of LHA. 

According to the Joseph Rowntree Foundation, freezing LHA rates for the duration of this Parliament will pull 50,000 renters into poverty, 60,000 will be pushed into deep poverty and 80,000 will be pushed into very deep poverty.

The figures come at a time of intense competition for rental housing with data from Zoopla showing that there are now an average of 12 renters chasing every available home to rent. 

The NRLA warns that freezing LHA rates will serve only to undermine the ability of claimants to prove their ability to sustain a tenancy, particularly amid intense competition for a limited supply of rental homes. It is calling for rates to be re-pegged to at least the lowest 30 per cent of rents for the duration of this Parliament. 

Ben Beadle, Chief Executive of the NRLA, said:

“It beggars belief that ministers are making it harder for those reliant on housing benefits to sustain their tenancies, especially in an already fiercely competitive rental market.

“Tenants shouldn’t be expected to endure the uncertainty of not knowing what support they can access from one year to the next. It is time to end the insecurity they face and unfreeze housing benefit rates.”  

-ENDS-

Notes:

•    According to the most recent data on the Department for Work and Pension’s StatXplore portal, as of November 2024 1,611,189 private rented households were in receipt of Universal Credit with a housing cost support element including in the payment (Local Housing Allowance). Of this group, 772,731 households (48%) had a gap between the housing cost support their received and their monthly rents. 

•    The last time housing benefit rates were frozen, the Institute for Fiscal Studies reported that just 5% of rental properties were affordable to those in receipt of the LHA.

•    According to an analysis by the Joseph Rowntree Foundation, if the LHA remains frozen for the duration of this Parliament, 50,000 renters will be pulled into poverty, 60,000 will be pushed into deep poverty and 80,000 (including 30,000 children) will be pushed into very deep poverty.

•    Data from Zoopla shows that there are now an average of 12 renters chasing every available home to rent. The HCLG Minister, Baroness Taylor of Stevenage, has noted, “demand is currently outstripping the supply of properties available to let.”

•    The NRLA joins with organisations including the JRF and the Resolution Foundation in calling on the Government to re-peg LHA rates to at least the lowest 30% of rents and keeping them there for the duration of this Parliament. 

•    Further information about the NRLA can be found at www.nrla.org.uk.  It posts on X @NRLAssociation.

•    The NRLA’s press office can be contacted by emailing [email protected] or by calling 0300 131 6363.