Housing benefit gap leaves one million renters struggling

Housing benefit gap leaves one million renters struggling

0:01 AM, 5th March 2024, About 3 months ago 10

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One million private renters who depend on Universal Credit are unable to cover their rent with the housing benefit they receive, the National Residential Landlords Association (NRLA) reveals.

It has analysed government data and found that two-thirds of the 1.5 million households renting privately in Britain and receiving Universal Credit have a shortfall between their Local Housing Allowance (LHA) payment and their monthly rents.

The LHA is the housing benefit component of Universal Credit, which is supposed to cover the lowest 30% of rents in any given area.

However, since April 2020, the LHA rate has been frozen, resulting in a disconnect between benefit rates and market rents.

‘Fix the broken housing benefit system once and for all’

The NRLA’s chief executive, Ben Beadle, said: “It is time to fix the broken housing benefit system once and for all.

“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.”

He adds: “All parties need to commit to ensuring housing benefit rates permanently track average rents.

“This would end the bizarre and morally absurd spectacle of the support available being completely detached from the cost of housing for renters.”

Only 5% of private rental properties are affordable

The Institute for Fiscal Studies estimates that only 5% of private rental properties are affordable for those relying on the LHA.

And the Institute for Public Policy Research warns that even after the LHA rate is unfrozen in April, more than 800,000 households on Universal Credit will still face shortfalls between their housing support payment and the rents they pay.

The situation is expected to deteriorate further as the LHA rate is due to be frozen again after April, meaning that the benefit rates will fall behind rent levels once more.

The NRLA is urging all parties to provide certainty to renters and responsible landlords by ensuring housing benefit rates remain pegged to at least the lowest 30% of rents throughout the next Parliament.


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Comments

GlanACC

10:07 AM, 5th March 2024, About 3 months ago

So basically those that are not economically active want to continue lying on the sofa and expect us (ME) to five them a free ride. Sure if you genuinly can't work because of disability then you should be entitled to subsidised housing. Being overweight and lazy and tatooed to the hilt with a pig ring through your nose and basically making yourself unemployable deserve exactly what they (are not) getting.

GlanACC

9:00 AM, 6th March 2024, About 3 months ago

I can't agree that the banks are the villains here. They are in business to make money as are you and I. I had a massive interest only loan of £1.8 million but it was obvious that at some time that would have to be paid off. Probably most landlords who have these loans expect it to be paid off by selling the property at some time (could be a bit uncertain now with S21 going). As a business decision I sold some propery to pay off the others. You can't blame landlords with no mortgage. Renting is not something you tuck away for your pension, it has to be planned, and planning for interst rises is part of that planning. I had a problem shifting one of my tenants to sell just as the loan expired. The bank were more than helpful as I showed them the S21 and explained the situation, thet got have got awkward but instead kept me on my low interest rate and gave me another 3 months to sell. I agree that most of the issues today are caused by the government, and in particular by local councils. All you can do going forward is cherry pick the tenants and leave the dross to fend for themselves. The only problem with this is the local council will put them in B+Bs at an extortionate cost to the council tax, so you lose that way. The government will never build enough social housing, they simply don't have the money to do it. Private enterprise won't build it either as they don't want the dross.

Jonathan Clarke

10:55 AM, 10th March 2024, About 3 months ago

I reduced my exposure to the LHA/ UC market by 75% of my portfolio to 10% over the last 15 years by natural wastage . When i met with my councils housing chief exec and their committee about 15 years ago to explain why I was reducing my exposure and inform them where they were going wrong they just looked blank . It was as if they just simply didn't get what private enterprise was all about . I explained there are 3 people in this relationship that you need to keep happy. Yourselves , the LHA tenants and me . We should all talk to each other and be transparent . I said at the moment you don't talk or listen to me . You also actively tell the tenant to work against me rather than work with me. When you learn this should be an equal 3 way conversation then and only then can we progress . I will house your tenants if you pay the taxpayers funded LHA rent to me direct rather than to a vulnerable alcoholic tenant who will spend it on booze and end up having their stomach pumped ( true story ) He said ok fair enough he would work on that. He didn't and I never heard from him again.

GlanACC

12:22 PM, 10th March 2024, About 3 months ago

The housing benefit system is NOT broken, it might not please tenants or landlords as to the low level of the LHA but its not the tenants or landlords job to decide what the country can afford. Even though I am a loandlord I don't want the LHA rasing to make other landlords comfortable as it will be ME that pays in the end. Its up to the government to buy / build / convert properties for those that can't afford them

Jonathan Clarke

12:54 PM, 10th March 2024, About 3 months ago

Reply to the comment left by GlanACC at 10/03/2024 - 12:22
HB is broken in the PRS in the sense that as LL`s leave the LHA system in droves and incoming new LL`s reject HB tenants in favour of private due to the unacceptable Dinasour style set DWP has - then that leads to a net loss in the PRS sector as the structure has become unsustainable. Its up to the government to yes buy / build/ convert if it cannot work in unison with the PRS and so take them back as council tenants. The Council used to buy mine off me but i had to evict the tenants first. So i was forced to make an HB tenant family homeless and they then housed them in a TA B&B out of town disrupting their whole lives in the process. But immediately they would replace them with another homeless family from the same TA B&B. Just swopped one for another . Crazy

Monty Bodkin

18:47 PM, 10th March 2024, About 3 months ago

Reply to the comment left by GlanACC at 10/03/2024 - 12:22The housing benefit system is NOT broken, it might not please tenants or landlords as to the low level of the LHA but its not the tenants or landlords job to decide what the country can afford.

What a load of old b@ll@cks.

Being a landlord is optional and they can decide accordingly..

GlanACC

18:59 PM, 10th March 2024, About 3 months ago

Reply to the comment left by Monty Bodkin at 10/03/2024 - 18:47
Yup, being a landlord is optional. So moaning about the low LHA would probably only affect those that wish to take LHA tenants. So if you don't like the low price and risks associated with LHA then invest in alternative property, you buys the property and its your choice - just don't expect the government to fund 100% of the rent.

Monty Bodkin

19:14 PM, 10th March 2024, About 3 months ago

Reply to the comment left by GlanACC at 10/03/2024 - 18:59"- just don't expect the government to fund 100% of the rent."

Landlords don't expect anything at all from government, being a landlord is optional and they are leaving the sector in droves with a 2 finger salute.

Feck off and sort out the problems you have created is the clear message.

GlanACC

19:26 PM, 10th March 2024, About 3 months ago

Yup, I have left - sold 12, 6 left which I won't sell until tenants leave. My tenants decorate the properties, and one guy and his family have been in 20+ years. I have offered them money to leave with no takers. I wont get rid of them unless they don't pay the rent. Problem I have is a couple of them are coming up to retirement age

Monty Bodkin

19:32 PM, 10th March 2024, About 3 months ago

Reply to the comment left by GlanACC at 10/03/2024 - 19:26
I think we might be on the same song sheet GlanACC.

Apologies for any misdirected frustrations.

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