57% of PRS benefits tenants now have a Local Housing Allowance shortfall

Official data shows that of all private rented households in receipt of the Local Housing Allowance over half, 57%, have a shortfall. This amounts to just over 820,000 households.

Regionally, the proportion of private rented households affected ranges from almost 41% in London (although based on a much higher number of claimants), through to 69% in Wales.

The figures come as the Office for Budget Responsibility has warned that housing-related benefits spending is expected to rise by just 0.1% of GDP by 2025 – five years on from the start of the pandemic and the recession it caused. It notes that this is the smallest increase seen in any of the four recessions seen since the early 1980s.

Despite private rents increasing by less than inflation, the National Residential Landlords Association (NRLA) is warning that vulnerable renters face a perfect cost of living storm. It is being worsened by housing benefit rates having been frozen since April 2021, rising energy and food prices and a chronic shortage of private rented housing which is set to drive up rents.

Amidst the cost-of-living crisis, the NRLA is calling on the Government to unfreeze housing benefits rates to provide tenants and landlords with the security that rents can be paid.

Ben Beadle, Chief Executive of the National Residential Landlords Association, said:

“Vulnerable renters are facing a perfect storm of rising costs matched by a benefits system that is failing to keep up.

“Whilst the Chancellor’s one-off pots of money to support households are welcome, these cannot be used to hide the deficiencies of the benefits system. Landlords and tenants are dismayed at the Government’s chronic inaction to make the changes they desperately need.

“With inflation soaring we cannot wait any longer. The Chancellor needs to do the right and logical thing by unfreezing housing benefits without delay.”