Call for budget to fix housing benefit system

'It is making it impossible for anyone to plan for the future,' says chief executive

Call for budget to fix housing benefit system

The National Residential Landlords Association (NRLA) is calling for Chancellor Jeremy Hunt to address the housing benefit system in his budget.


“It is time to fix the broken housing benefit system once and for all,” said Ben Beadle (pictured), chief executive of the NRLA.

According to the NRLA, about 1.5 million privately rented households in Britain receive Universal Credit. This also includes support for housing costs, known as the Local Housing Allowance (LHA). However, the NRLA found that about 64% of them will suffer a shortfall between their LHA payment and monthly rents.

READ MORE: Landlord reiterate call for balance approach over Renters (Reform) Bill

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

Meanwhile, the Institute for Public Policy Research has warned that more than 800,000 households that rely on Universal Credit will continue to experience shortfalls when it comes to their payment for housing support and their monthly rents. With the upcoming freeze in April, the scenario is expected to worsen as rates will be detached from the rent level once more.

Ahead of the budget, the NRLA is calling for certainty for renters and landlords by ensuring housing benefit rates remain pegged to at least the lowest 30 per cent of rents throughout the next Parliament.

“The repeated freezes of the support available and the lack of clarity about rates in the future is causing insecurity and anxiety for renters and landlords alike. It is making it impossible for anyone to plan for the future,” said Beadle.