Housing benefit system fails to reflect reality of rent levels

ALMOST 65 per cent of private tenants who rely on Universal Credit to pay their rent have a shortfall between the amount they receive and what they have to pay.

By Gemma Jimmison
Tuesday, 19th April 2022, 12:06 pm
Stock photo glass Money bottle. Saving pennies
Stock photo glass Money bottle. Saving pennies

Official data shows that across Yorkshire and the Humber, 64 per cent of renters who receive housing benefit have a gap.

Government figures show that across the region the average shortfall between the support such tenants receive and the rent they pay is almost £87 a month.

Within the region this varies from £70 in North East Lincolnshire, through to £125 in Craven and York. The proportion of tenants affected ranges from almost 82 per cent in Craven to around 36 per cent in Selby.

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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 response to the pandemic the Government increased the allowance 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 and remains frozen in 2022/23.

As a result of the freeze, the link between local rent levels and the amount of housing benefit support received has been broken. This means the number of properties that private renters in receipt of Universal Credit can afford is likely to steadily decline.

This is despite rents across Yorkshire and The Humber having increased by less than inflation.

In highlighting these figures, the National Residential Landlords Association (NRLA) calls on the Government to unfreeze the Local Housing Allowance and so restore the link between the allowance and the cost of local rents.

Ruth Millington, Yorkshire and The Humber Spokesperson for the NRLA, said: “The benefits system fails to provide renters and landlords across Yorkshire and The Humber with the security they need.

“It cannot be right that housing benefit support fails to reflect the reality of current rent levels.

“ The freeze merely exacerbates the already serious cost of living crisis for tenants across the region.

“The Chancellor needs to listen and respond to the concerns of both renters and landlords by unfreezing housing benefits as a matter of urgency.”