Landlords have called on the government to end its ‘absurd’ housing benefits system whereby a majority of renters in receipt of Universal Credit have an average gap of £100 between their housing payments and the rent they pay.
The NRLA says 56% of renters in receipt of housing support via Universal Credit are in this situation, while the figure for those with two children rises to 60%.
The figure also varies wildly depending on the region from 40% in London to nearly 70% in Wales.
It is claimed that this situation will lead to landlords, many of whom are already wary of tenants in receipt of benefits, avoiding this category of renter and the pool of PRS properties available to them shrinking.
LHA trap
The problem is linked to the Local Housing Allowance system which is used to calculate the amount tenants can receive to support housing costs as part of a Universal Credit payment.
In response to the pandemic the Government lifted it in April 2020 so that it covered the bottom 30 per cent of private rents in any given area. In April last year the rate was frozen in cash terms.
As a result of this, housing benefit support is no longer linked to current rents which, given yesterday’s official data showing 53% of tenants are unable to absorb a financial shock, means landlords face tenants who are more likely to build up rent arrears during the current cost of living crisis.
“It is simply absurd that housing benefit support fails to reflect the reality of rents as they currently stand,” says Ben Beadle, Chief Executive of the NRLA (pictured).
“The Chancellor needs to listen and respond to the concerns of both renters and landlords and unfreeze housing benefits as a matter of urgency.”
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