Universal Credit claimants face housing affordability crisis despite benefit increase

Universal Credit claimants face housing affordability crisis despite benefit increase

8:53 AM, 4th April 2024, About 3 months ago 4

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Universal Credit claimants face a severe shortage of affordable rental properties, with a recent rise in housing benefit failing to keep pace with soaring rents.

While Local Housing Allowance (LHA) will increase for the first time in four years from this week, research by Savills reveals a significant gap.

It says that the average LHA rise of 17% falls short of the 28% average growth in private rents over the past four years.

This translates to just 8.5% of properties being affordable for benefit claimants, far below the targeted 30% minimum.

‘Issues of affordability are not exclusive to those reliant on LHA’

Steve Partridge, a director at Savills’ affordable housing consultancy, said: “Issues of affordability are not exclusive to those reliant on LHA or the private rented sector.

“They impact all tenures and are a result of a shortage of supply of housing to both rent and buy, combined with a spike in housing demand.

“This emphasises the need for delivery of more homes of all tenures.”

He added: “Increased housing supply would also help reduce the numbers of people living in temporary accommodation.

“According to government figures, there were 105,750 households living in temporary accommodation in England in 2023.

“This was the highest level on record and 10.5% above the year before.”

Research also reveals regional disparities

The firms’ research also reveals regional disparities with Scotland having the highest proportion of affordable listings (14.9%), followed by England (8.2%) and Wales (5.5%).

However, no area meets the 30% target, with Lincoln boasting the highest coverage at 24.5%.

The issue is further complicated by property size, Savills says.

While LHA covers more one-bedroom properties (15.7%) than others, followed by four-bedrooms (9.8%), it falls short of the demand for two and three-bedroom properties, typically preferred by families with children, which make up 59% of benefit claimants in the private rented sector, according to the English Housing Survey.


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Comments

Cider Drinker

9:17 AM, 4th April 2024, About 3 months ago

On average, rents are reported to have increased by 41% since 2019 (when Local Housing Allowance rates were last set).

LHA in my area has risen by less than 11% in that same timeframe.

With benefit claimants being unable to pay the required levels of rent to make BTL sustainable, it is time for me to consider holiday letting or selling up.

TheMaluka

13:47 PM, 4th April 2024, About 3 months ago

Wow, this has come as a complete surprise!

Michael Booth

15:06 PM, 4th April 2024, About 3 months ago

Plenty of houses in the North East for universal credit claimants , if l told you what l charge rent you would call me a clown for what l charge 3 bed house in nice areas.

Cider Drinker

16:45 PM, 4th April 2024, About 3 months ago

Reply to the comment left by Michael Booth at 04/04/2024 - 15:06Within 5 miles of my area of interest in the NE, there are no 2 or 3 bedroom properties available on RM for less than the LHA.
The revised LHAs are £475 and £550 for 2 and 3 bedrooms respectively. At those rates, it is no longer viable. Serco are offering better rates to house migrants.

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