The NRLA has urged Chancellor Jeremy Hunt to definitively fix the broken housing benefit system by tackling the Local Housing Allowance (LHA) funding gap.

Ahead of next week’s Budget, it wants him to provide certainty to renters and responsible landlords by ensuring housing benefit rates remain pegged to at least the lowest 30% of rents throughout the next Parliament.

NRLA analysis of government data suggests that of the 1.5 million households renting privately in Britain who receive Universal Credit with includes support for their housing costs, two thirds (nearly one million households) have a shortfall between their LHA payment and their monthly rent.

Freeze

In April, the LHA rate will again be pegged to the lowest 30% of rents in any given area. This follows a freeze which was introduced in April 2020 which caused benefit rates to be detached from market rents. According to the Institute for Fiscal Studies, this led to just 5% of private rental properties being affordable for those relying on the LHA.

The Institute for Public Policy Research has warned that even when the rate is unfrozen, more than 800,000 households on Universal Credit will continue to face shortfalls and the picture is set to worsen given that LHA rates are due to be frozen again after April.

NRLA chief executive Ben Beadle (pictured) says the repeated freezes of the support available and the lack of clarity about rates in the future is causing insecurity and anxiety for both renters and landlords.

He adds: “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.”

‍