Housing Benefit freeze sees tenants falling ‘£200 short’ every month

Housing Benefit freeze sees tenants falling ‘£200 short’ every month

0:03 AM, 18th August 2023, About 10 months ago 3

Text Size

Families on low incomes are grappling with a monthly deficit of £200 due to a stagnant housing benefit that doesn’t cover soaring rents, a charity warns.

Housing advisors from Wiltshire Citizens Advice told the BBC that tenants relying on Housing Benefit are facing a severe shortage of rental properties that are covered by it.

And the result is causing a financial strain on vulnerable households.

Claire Waltham-Smith from the charity says tenants are resorting to sacrificing essentials to pay their rent.

She also says that families are on the brink of eviction due to the insufficient benefit support.

‘People are falling into rent arrears’

Ms Waltham-Smith told the BBC: “People go without energy or food, they are falling into rent arrears, they face eviction.

She points out that a tenant’s LHA is £650 per month but the cheapest flat available is £850 – and most are more than £900.

She says: “That leaves them with a shortfall of £200, £250 per month.

“People on these incomes can’t find that kind of money every month.

“They end up going without other essentials or falling into rent arrears.”

Renters on low incomes qualify for Universal Credit

Most renters on low incomes qualify for Universal Credit which includes a housing component based on the Local Housing Allowance (LHA).

Since April 2020, however, the LHA has remained frozen, despite rental costs nationwide surging by more than 20% since 2020.

Recent statistics indicate an additional 5.3% rise in rents over the past year alone.

The BBC report highlights that the shortage of homes isn’t confined to Wiltshire – in North Somerset, there are virtually no available rental properties available for anyone on housing benefit.

Private rented properties covered by the Local Housing Allowance

Economists from the Institute for Fiscal Studies (IFS) have found that there has been a huge decline in private rented properties covered by the Local Housing Allowance.

The freeze initially covered around 23% of such properties but by this year, this coverage had plummeted to just 5%.

Tom Waters, the IFS researcher, expressed concern over the dramatic decline, highlighting the fact that four in 10 private renters rely on housing benefit.

A cross-party committee of MPs has also recently called for a revision of the Local Housing Allowance, condemning the stagnancy of benefit rates.

A government spokesman said: “We are set to spend over £30 billion on housing support this year, on top of significant cost of living help worth around £3,300 per household.

“On top of this we have raised benefits and the state pension in line with inflation and increased the National Living Wage as we bear down on inflation to help everyone’s money go further.”

Share This Article


Mick Roberts

10:22 AM, 18th August 2023, About 10 months ago

A Govt spokesperson said.

We not interested in this that this that.
We interested in what Govt IS DOING NOW for the 100's of 1000's in the UK impacted EXACTLY like this article case.
Nottingham 3 bed rent £950. LHA 3 bed rate £625.02 .
How are UC families supposed to afford that?
Cause charites like Me and the very few rare remaining UC landlords left ain't stomaching it for much longer-Ooh we not a charity are we. Or are we? Cause Shelter and Sadiq Khan thinks we are too. Ooh so I might be then?
I can't be, cause Selective Licensing says I've got to pay £890 for EACH house on a tenant that's paying 70% of market rent.
Sorry going off topic ha ha

Judith Wordsworth

10:23 AM, 18th August 2023, About 10 months ago

Many of my past Housing Benefit tenants were well able to work but chose not to,or as I found out to my cost, worked in the black economy.

Whilst I realise that there are many people on benefits who are unable to work, for many more who could work but choose not to there should be “incentives” to do so. Perhaps having to pay a shortfall is one.

You can now work 18 hours a week without the income affecting benefits. Can be, I understand, 18 hours on minimum wage or higher per hour as it’s the hours not the £ amount.

There are currently, according to the ONS, more job vacancies than people wanting/willing to work.

In rural areas our farmers are ploughing in food crops they cannot get labour to harvest.

The Forever Tenant

12:50 PM, 18th August 2023, About 10 months ago

Just wanted to touch on this, I can only say about Universal Credit as that is one I have experience with and only in relation to a joint application with my wife.

They first add up all the benefits to which you may be entitled. So housing benefit, child tax credits, etc and come up with a final total of what you could possibly get.

They then take your total earnings over the month, deduct £379 from that amount, then take off 45% of that remaining amount. That final total is deducted from the initial combined benefit figure. For example, £1,000 earned would then become £621, which in turn gets calculated to £341, so £341 would get taken off your benefits.

It's not down to hours, its purely based on the amount you earn. However it works out roughly to 1 person working 8 hours at minimum wage per week before it starts impacting benefits.

As for the "incentives" to work. Basically work or you starve, that doesn't work out to well. They tried it, it was called Workfare. Turns out the companies themselves didn't like having people working in their places that really didn't want to be there.

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now