Almost a million private rented households reliant on Universal Credit experience a shortfall between the benefit payments they receive and the amount they pay in rent, says the National Residential Landlords Association.

In total, 1.5m households renting privately in Britain receive Universal Credit which includes support for their housing costs, known as the Local Housing Allowance . However, an analysis of government data by the NRLA suggests that of this group, two thirds have a shortfall between their LHA payment and their monthly rents.

As of next month, the LHA rate will once again be pegged to the lowest 30 per cent of rents in any given area. 

This follows a freeze which was introduced in April 2020 which has caused benefit rates to be detached from market rents. According to the Institute for Fiscal Studies, it led to just five per cent of private rental properties being affordable for those relying on the LHA.

The Institute for Public Policy Research has warned that even when the LHA rate is unfrozen, over 800,000 households on Universal Credit will continue to face shortfalls between their housing support payment and the rents they pay. The picture is set to worsen given that LHA rates are due to be frozen again after April, leading to the rates becoming divorced from rent levels once again. 

Ahead of tomorrow’s Budget, the NRLA is calling on all parties to provide certainty to renters and responsible landlords by ensuring housing benefit rates remain pegged to at least the lowest 30 per cent of rents throughout the next Parliament.

NRLA chief executive Ben Beadle says: “It is time to fix the broken housing benefit system once and for all. The repeated freezes of the support available and the lack of clarity about rates in the future is causing insecurity and anxiety for renters and landlords alike. It is making it impossible for anyone to plan for the future.

“All parties need to commit to ensuring housing benefit rates permanently track average rents. This would end the bizarre and morally absurd spectacle of the support available being completely detached from the cost of housing for renters.”