Landlord Eye (#01 Winter Edition): Universal Credit & Local Housing Allowance

Each quarter the NRLA consults landlords across England and Wales on key issues affecting the private rented sector (PRS). The first Landlord Eye survey of 2025 ran from late January to early February, gathering insights from more than 1,300 landlords. The new Landlord Eye uses an artificial intelligence platform, Wordnerds, to securely and anonymously analyse comments and insights provided by all participants (who wish to so contribute).   

Topics covered included:

• Landlord confidence
• Universal Credit
• Local Housing Allowance
• Energy efficiency and insulation
   

Confidence among landlords remains historically low, with the index rising only marginally to 31.3—the third-lowest score recorded since the series began in 2019. Confidence in Wales rose again and has now outpaced England for five consecutive quarters.

Sentiment continues to be weighed down by uncertainty surrounding the Renters (Reform) Bill and the government’s ongoing Minimum Energy Efficiency Standards (MEES) consultation. Many landlords expressed concern over potential new EPC targets and the financial implications of meeting them.

After several years of growth, the proportion of landlords letting to tenants on Universal Credit has plateaued since 2023 at just over 40%. This quarter recorded a slight drop to 41%, down from 43% in Q1 2024. Essentially this is unchanged since last year.

Landlords gave a more upbeat message on arrears:

• Rent arrears among UC tenants fell to their lowest levels since 2016
• 81% of landlords with working UC tenants reported no significant arrears

However, long-standing issues persist:

• 63% of landlords experiencing arrears blamed DWP delays or system errors
• 1 in 3 landlords said nothing would encourage them to take on more UC tenants
• Many cited poor communication and uncertainty around payments as major barriers

85% of landlords said LHA rates are irrelevant to the rent they charge. Among the 15% who do let at or near LHA levels, most cited social good as their primary motivation.

But sustainability is in question:

• A majority said they would raise rents or sell LHA properties once a tenant moves out
• Just 7% said they would continue letting at LHA rates for new tenancies
• The planned LHA rate freeze in April 2025 is expected to widen the gap between benefit levels and market rents further.

Landlords were also asked about their insulation upgrades and awareness of government support schemes ahead of the MEES consultation.

Key findings:

• 33% of landlords had made no insulation improvements in the past two years
• Of those who had invested, 81% spent less than £5,000 per property just on insulation.
• 58% had never heard of the Great British Insulation Scheme (GBIS)
• The sentiment of those who had used the scheme was mixed, with landlords reporting confusion over eligibility and inconsistent experiences with providers