The National Residential Landlords Association has called for the government to raise levels of Universal Credit to deal with current shortfalls.
As it stands there are 1.5 million households rent privately using the Local Housing Allowance, though two thirds (64%) of the group have a shortfall between the payment and their monthly rent.
Ben Beadle, chief executive of the National Residential Landlords Association, 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.
“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.”
As of April, the LHA rate will once again be pegged to the lowest 30% of rents in any given area. This follows a freeze which was introduced in April 2020 which has caused benefit rates to be detached from market rents. According to the Institute for Fiscal Studies, it led to just 5% of private rental properties being affordable for those relying on the LHA.
The Institute for Public Policy Research has warned that even when the LHA rate is unfrozen, over 800,000 households on Universal Credit will continue to face shortfalls between their housing support payment and the rents they pay. The picture is set to worsen given that LHA rates are due to be frozen again after April, leading to the rates becoming divorced from rent levels once again.