Association calls for an immediate action
Millions of renters and landlords in the UK are grappling with chronic uncertainty due to a lack of clear commitments from major political parties regarding housing benefit rates, according to one association. Over 1.5 million households in Britain’s private rental sector rely on Universal Credit to help cover their housing costs, specifically through the Local Housing Allowance (LHA). However, analysis by the National Residential Landlords Association (NRLA) indicates that nearly two-thirds of these households face a shortfall between their LHA payments and their rent.
In April 2024, the LHA was pegged to cover only the lowest 30% of rents in each area, following a freeze that began in 2020. This freeze caused benefit rates to fall out of step with market rents, resulting in only about 5% of private rentals being affordable for LHA recipients, according to the Institute for Fiscal Studies.
The Institute for Public Policy Research warned that despite recent adjustments, more than 800,000 households on Universal Credit will still encounter rent shortfalls. This situation is expected to worsen with another LHA rate freeze scheduled for April 2025.
None of the major political parties have included a commitment in their manifestos to permanently link housing benefit rates to the lowest 30% of rents for the next Parliament. According to the association, this omission disregards recommendations from the Work and Pensions Select Committee and leaves many in the private rental sector uncertain about their future.
Ben Beadle (pictured), chief executive of the NRLA, emphasised the urgency of reform, stating: “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.”
Beadle further criticised the lack of action from political parties, urging the next government to ensure that housing benefits keep pace with market rents to provide necessary stability for renters and landlords.
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