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

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

10:10 AM, 8th June 2022, About 2 months ago 10

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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.”



Comments

JamesB

11:30 AM, 8th June 2022, About 2 months ago

One of my properties has tenants in receipt of housing benefit. When they moved in about 10 years ago the market rent was £1250 and this was pretty much covered by their benefit. Their current housing benefit amount is £1375. The market rent for a 3 bed in their road is now somewhere between £1800 and £2000pcm. The benefit that used to cover a 3 bed house would now cover a 1 bed or lower end 2 bed flat in the area.

northern landlord View Profile

14:39 PM, 8th June 2022, About 2 months ago

James, LHA rates are way behind market rents. Around here the LHA rate for a 3 bed house is £593/month. Market rent is £775. So both our LHA rates are around 75% of actual rates. I expect this relationship will hold throughout the country.

DSR

16:50 PM, 8th June 2022, About 2 months ago

makes you laugh when social housing is marketed at 'affordable rent'.

This is usually OVER the LHA rate but under market rent, yet the government and benefit tenants still think that private LL's are thieving sods when all I do is raise the rent to match or slightly above the LHA rate!

DSR

16:52 PM, 8th June 2022, About 2 months ago

Reply to the comment left by JamesB at 08/06/2022 - 11:30
out of curiosity then - what rent do you charge them?

northern landlord View Profile

17:13 PM, 8th June 2022, About 2 months ago

As I understand it “affordable rent” is 80% of market rent and is typically what Housing associations charge. “Social rent” is 60% of market rent and is what Councils charge. Round here the Council have sold off many of their social houses (because they are not viable at social rents so are in a neglected state) to housing associations who have promptly increased the Social rent to affordable rent imposing a 30% rent rise on tenants which has not gone down well.The Housing association justify the rent increase as the money they need to bring the ex-Council houses up to a decent standard and keep them that way. Of course defining market rent as a reference point is difficult and it is a bit of a fast moving target these days

JamesB

17:19 PM, 8th June 2022, About 2 months ago

Reply to the comment left by DSR at 08/06/2022 - 16:52
£1400, but this is becoming unsustainable. I didn't mind being a bit below market but now I could get £7000 a year more if they were to leave.

northern landlord View Profile

17:28 PM, 8th June 2022, About 2 months ago

James B you could just section 21 them while you still can and make them leave. Should be easy if you are an uncaring, evil money grabbing PRS landlord as portrayed by Shelter and their pals. Don't want to do it? Me neither, we are a disgrace to our profession!

Old Mrs Landlord

18:05 PM, 8th June 2022, About 2 months ago

Reply to the comment left by northern landlord at 08/06/2022 - 17:28
Fromwhat I gather, there are many of us in this position. The Government keep saying they want to professionalise us but unfortunately a majority of us seem to be human and treat our tenants as people with problems we can relate to.

DSR

20:08 PM, 8th June 2022, About 2 months ago

Reply to the comment left by JamesB at 08/06/2022 - 17:19
I feel your pain. I keep thinking better the devil you know as opposed the tenant you don't.,,but something has to give.

The other issue is the deposit you took - bet that is the same as it was back then too. At least with a new tenant that's gets upped to the 5 week level on rent you could achieve.

Mick Roberts View Profile

8:09 AM, 9th June 2022, About 2 months ago

Yes they wrecking Benefit tenants lives.
It's the biggest gap in Nottingham I've ever saw in 25 years.
Example 3 bed rents in affordable areas £850. LHA 3 bed rate £625.

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