Increasing numbers of tenants in receipt of benefits are being pushed into poverty, problem debt and homelessness, an alliance of landlords, tenants, letting agents and poverty charities has revealed.

It is calling for the government to publish a full assessment of its decision to freeze Local Housing Allowance and cut Universal Credit despite a 107% increase in the number of private rented households in receipt of benefits during the pandemic.

Of these, 55% have experienced a shortfall between the housing support they receive and the rent they pay.

The government has already admitted that the median shortfall is £100 a month, a considerable sum for those managing on stretched budgets.

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Since April this year, Local Housing Allowance has been frozen in cash terms, and later this year, Universal Credit will be cut by £20 a week.

Reduced benefits

The figures will have a direct impact on landlords – tenants struggling on reduced benefits are more likely to be vulnerable to financial challenges and fall into rent arrears.

The alliance includes high-profile organisations including the Nationwide Building Society and its mortgage brokerage The Mortgage Works, Propertymark, Shelter, The Big Issue, Crisis as well as the National Residential Landlords Association.

A statement from the alliance says: “We believe that the UK Government should reverse its decisions to cut Universal Credit and to freeze Local Housing Allowance.

“To apply policies like these without doing any meaningful impact assessment is, we argue, lacking the necessary foresight and consideration of the impact they will have on people’s security of tenure and well-being and for many will threaten their chance of recovery.”

1 COMMENT

  1. There is an intrinsic problem with increasing LHA – it inadvertently causes rents to rise because when more people can afford a house in the PRS, because of the lack of supply, rents go up. Then, because LHA is set at a rate related to rents (30%) LHA goes up, so then rents go up again! It is an ever increasing circle that only benefits LLs (I know, I’m one). The answer is not to increase benefits but to build more affordable housing.

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