Almost half of all private renters who receive Local Housing Allowance experience a shortfall between their payment and monthly rent, according to new analysis by the National Residential Landlords Association (NRLA).

Ahead of a planned freeze of housing benefit rates in April, the NRLA points to figures from the Institute for Fiscal Studies indicating that the last time LHA rates were frozen in 2023, only 5% of rental properties were affordable to claimants.

Department for Work and Pension data shows that last November, 1,611,189 private rented households were in receipt of Universal Credit with a housing cost support element including the Local Housing Allowance. Of this group, 772,731 households - at 48% - had a gap between the housing cost support and their monthly rents.

Pushing tenants into poverty

According to the Joseph Rowntree Foundation, freezing LHA rates for the duration of this Parliament will pull 50,000 renters into poverty, while 60,000 will be pushed into deep poverty and 80,000 will be pushed into very deep poverty.

The figures come at a time of intense competition for rental housing, with data from Zoopla showing that there are now an average of 12 renters chasing every available rental home.

In a letter to Work and Pensions Secretary Liz Kendall, the NRLA warns that freezing LHA rates will serve only to undermine the ability of claimants to prove their ability to sustain a tenancy, particularly amid intense competition for a limited supply of rental homes.

It wants rates to be re-pegged to at least the lowest 30% of rents for the duration of this Parliament.

Ben Beadle, of the NRLA, said: “It beggars belief that ministers are making it harder for those reliant on housing benefits to sustain their tenancies, especially in an already fiercely competitive rental market.

“Tenants shouldn’t be expected to endure the uncertainty of not knowing what support they can access from one year to the next. It is time to end the insecurity they face and unfreeze housing benefit rates.”  

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