United Kingdom
April 14, 2022
PayProp Rent Report

Industry sounds alarm over benefit shortfalls

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The National Residential Landlords Association is calling on the government to increase Local Housing Allowance payments to tenants on Universal Credit.

Research by the industry group has found that fewer than half of claimants receive enough in Local Housing Allowance to cover their rent. Shortfalls are especially common in Wales and North East England, where almost 70% of tenants have to top up their housing payments from their other income. On average, tenants with a shortfall are left £100 per month out of pocket.

Local Housing Allowance was increased in April 2020 to cover the bottom 30% of local rents as part of the government’s COVID-19 response, but has been frozen in subsequent years. With rents increasing and inflation on the rise, the ongoing benefit freeze will place further financial pressure on tenants, potentially reducing their ability to pay rent. Anti-poverty campaigners claim that state benefits are now at their lowest level in real terms for 50 years.

The NRLA is now asking the government to restore the link between Local Housing Allowance and local rents, and increase the payments to cover the average private rent for the area. Such a move would help low-income tenants to avoid falling into arrears, although potentially at a high cost to the public purse.

Other landlord headlines

It’s time to regulate rent-to-rent, says NRLA leader – LandlordZONE

Lenders speed up passing on interest rate rises to landlords – Landlord Today

1 in 3 landlords say their portfolio is less profitable after tax changes – Property Reporter

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