Welfare Reform

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Summary

The private rented sector provides homes to many tenants who are in receipt of benefits and either do not want to or are unable to access social housing.

However, problems with the implementation of Universal Credit as well as the lengthy freeze on Local Housing Allowance rates have led to the proportion of landlords letting to tenants in receipt of benefits falling over the past decade.

There is an opportunity to better utilise the private rented sector as part of the solution to housing challenges but Government policy needs to recognise this and help to address landlords’ concerns about the higher risks, particularly as the country faces the impact of the coronavirus outbreak.

Key asks

On Universal Credit (UC), we are calling for:

  • an end to the five-week wait for Universal Credit at the beginning of a claim, with the advance payment currently made as a loan converted to a grant, so tenants do not automatically fall into debt at the outset.

On the Local Housing Allowance (LHA), we are calling for:

  • at minimum, the Government to commit to aligning LHA rates to the 30th percentile of market rents permanently, rather than as a short term response to the coronavirus crisis. We are further calling for the Government to realign rents to the median market rents (50th percentile)
  • an end to the benefit cap so that tenants can receive the full LHA rate towards their rent.

Data analysis of the issue

Research Provided by NRLA Research Observatory

Landlords renting to tenants in receipt of benefits
28.2%
Landlords with UC tenants experiencing rent arrears in last year
60.4%
Arrears arose after tenant applied / moved onto UC
81.3%

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