Posts with tag: local housing allowance

‘Absurd’ benefit freeze must end, says National Residential Landlord Association

Published On: April 1, 2022 at 8:31 am


Categories: Landlord News,Tenant News

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The NRLA is calling on the Government to unfreeze the Local Housing Allowance to cover average rent.

Official data suggests that 56% of private renters relying on Universal Credit have an average gap of £100 a month between the amount they receive in housing cost support and rent payments, reports the National Residential Landlords Association (NRLA).

Almost 60% of renters with two children relying on Universal Credit to help pay their rent have a shortfall between their rent and the benefits they receive.

Regionally, the proportion of tenants affected ranged from just over 40% in London (although based on a much higher number of claimants) to over 68% in Wales.

The Local Housing Allowance is used to calculate the amount tenants can receive to support housing costs as part of a Universal Credit payment. In response to the pandemic the Government lifted it in April 2020 so that it covered the bottom 30% of private rents in any given area. In April last year the rate was frozen in cash terms.

As a result of the freeze, housing benefit support is no longer linked to current rents. It means the number of properties that private renters in receipt of Universal Credit can afford will steadily decline.

Office for National Statistics (ONS) data says that 53% of adults who rent their home reported that they could not afford an unexpected expense. This is happening despite private rents across the UK having increased by far less than inflation.

Ben Beadle, Chief Executive of the NRLA, comments: “It is simply absurd that housing benefit support fails to reflect the reality of rents as they currently stand. All the freeze is doing is exacerbating the already serious cost of living crisis.

“The Chancellor needs to listen and respond to the concerns of both renters and landlords and unfreeze housing benefits as a matter of urgency.”

UK renters could be pushed into poverty by government benefit cuts

A joint statement warning about the impact the UK Government’s benefit cuts could have on renters has been released this week.

The Big Issue Ride Out Recession Alliance, Crisis, The Mortgage Works, Nationwide Building Society, the National Residential Landlords Association (NRLA), Propertymark, StepChange Debt Charity, and Shelter have together released this statement:

The UK Government must complete and publish a full assessment of the impact on renters of their decisions to freeze Local Housing Allowance and cut Universal Credit, which risk pushing many households into poverty, problem debt, and homelessness.

In the wake of the pandemic, we saw bold and swift action from the Government to prevent a housing debt crisis including restoring Local Housing Allowance rates to the 30th percentile of market rents and increasing the Universal Credit Personal Allowance.

With the economic impact of the pandemic increasing the financial strain on families, across the country the number of private rented households in receipt of the housing element of Universal Credit increased by 107% between February 2020 and February 2021. Over 55% of these households have a shortfall between the housing support they receive and the rent they have to pay. 

The UK Government has confirmed that where such shortfalls exist, the median amount is £100 a month. This points to a need for continued support for families and individuals to cover the cost of rents. Yet since April this year, Local Housing Allowance has been frozen in cash terms, and later this year, Universal Credit will be cut by £20 a week. 

Whilst the Institute for Fiscal Studies has described changes to Local Housing Allowance as “arbitrary and unfair” we have seen no assessment from the UK Government of the impact either of these policies will have on the capacity of recipients to cover rent payments. 

As organisations representing landlords, letting agents, tenants, people facing homelessness, and debt advice services, we are united in calling on the UK Government to complete and publish a full assessment of the impact of both of these policies on the ability of renters to meet their housing costs.

We believe that the UK Government should reverse its decisions to cut Universal Credit and to freeze Local Housing Allowance. To apply policies like these without doing any meaningful impact assessment is, we argue, lacking the necessary foresight and consideration of the impact they will have on people’s security of tenure and well-being and for many will threaten their chance of recovery.

153% increase in households hit by the benefit cap

Published On: June 24, 2021 at 9:38 am


Categories: Tenant News

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The Department for Work and Pensions (DWP) has released the latest experimental statistics on how many households have had their benefits capped between April 2013 and February 2021.

The key findings from the release are:

  • 200,000 households had their benefit capped at February 2021, compared to 79,000 at February 2020 – a 153% rise.
  • It represents a 13% increase in newly capped households on the last quarter.
  • Some people receive a nine-month grace period which protects them from being hit by the cap after losing their job. For people who lost their jobs at the beginning of the pandemic, this quarter’s data reflects the first time that they have been hit by the benefit cap.
  • Households had their benefits capped by an average of £55 a week, at February 2021. That works out at £238.15 a month.

Jon Sparkes, chief executive of Crisis, comments on the statistics: “Behind these figures are hundreds of thousands of people battling to keep roofs over their heads. Many will have lost jobs in the pandemic or are living day-to-day on insecure, zero-hour contracts.

“For so many, renting has become unaffordable. Rents continue to rise but Local Housing Allowance is frozen, creating a real-terms cut to housing benefit.

“We desperately need a strategy to provide the genuinely affordable homes needed to end homelessness, as well as more financial support for the hundreds of thousands of renters in arrears, to help them back from the brink.

“The UK government must also make people who are rough sleeping or stuck in temporary accommodation permanently exempt from the benefit cap, to give them a chance to end their homelessness for good.”

Councils Pay Landlords £4,000 to House Tenants

Published On: April 23, 2015 at 10:58 am


Categories: Landlord News

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Councils are paying private landlords up to £4,000 to house homeless tenants, as a shortage of social housing has forced authorities to entice the private sector with the incentives.

This news arrives as the Conservative party pledge to extend the right to buy scheme, which allows housing association tenants to purchase their home. This could worsen the housing shortage by selling around 1.3m properties, with councils struggling to replace them. Find out more here: /how-would-the-conservatives-right-to-buy-work/.

Councils in London and the South East are now advertising to private landlords with attractive cash incentives. Westminster Council in central London will pay up to £4,000 for landlords who accept council tenants. Tower Hamlets in East London has publicised a £2,500 payment for one-bedroom properties rented for two years by council tenants and £4,000 for two or more bedroom homes.

In Haringey, North London and nearby Barnet, private landlords are being offered payments of up to £3,000 for two-year tenancies. Southwark Council in South London will pay up to £2,000.

Housing charity Shelter says that these offers indicate a power switch between councils and landlords. Policy Officer at Shelter, Zorana Halpin, says: “Landlords don’t need local authorities, but local authorities need them.”

These cash incentives highlight the struggles that councils are already facing housing homeless families and individuals.

Councils Pay Landlords £4,000 to House Tenants

Councils Pay Landlords £4,000 to House Tenants

Increasing rents in the private rental sector and the cuts to housing benefit in 2011, have made landlords less likely to rent to council tenants, yet local authorities are finding it difficult to house the growing number of households dependent on this accommodation.

More councils have launched or increased cash incentives to landlords. November saw Hounslow Council in West London raising its payments, and in March, Basildon Council in Essex announced that it would start paying £1,000 for 12-month agreements and £1,500 for two-year tenancies.

Councils are so concerned over the lack of housing stock that payments are often made for homes in different boroughs.

Westminster Council said that it has paid landlords with properties outside London in the hope of housing people on its waiting list.

Housing consultant David Lawrenson says that landlords consider council tenants to be higher risk than private renters, and increasing rents in the private sector are more financially appealing.

For example, in Haringey, the average rent for a two-bedroom home is £1,556 per month, yet the maximum local housing allowance (LHA) for the same property is £1,109.

Lawrenson says: “There is supposed to be some kind of agreement to stop councils competing with each other, but these landlord incentives suggest that they are not working, as they still seem to be competing with each other to try to get that stock in. It’s only going to get worse as rents continue to rise.”1

The highest payments are made to landlords who take on council tenants for long-term contracts. The rent on these agreements is paid for in housing benefit claimed by the resident. Other schemes are open to landlords who let to council tenants for up to five years. In both situations, if the landlord did not take the tenant, then they would have to be housed in temporary housing such as a B&B.

Landlords who enter the schemes are not given a deposit, but could have to use the cash payment at the end of the agreement to make any repairs. However, the money is theirs to do as they please.

Benefits for 12-month tenancies are paid for by LHA, but this was cut in April 2011, making private renters more attractive to landlords.

Halpin says: “Local authorities used to procure large volumes of temporary accommodation from private landlords through leases; the rents they could pay were in line with market rates and it meant no void periods for landlords, so councils had a bit of negotiating power and the deal was attractive to landlords.”

Halpin explains that councils’ buying power has decreased: “The fact that councils are prioritising their spending to make sure people are being housed is a good thing, but we are concerned that they have limited resources and are having to use some of them to pay these incentives. Ultimately, the only long-term solution is to build more affordable homes.”1

Head of Policy at the Chartered Institute of Housing (CIH), Melanie Rees, says that councils have been given more freedom to help house homeless people by making use of the private rental sector, despite benefit cuts reducing the rents paid to private landlords.

She says: “But welfare reform, in particular the benefit cap, has cut the amount of benefits that people receive and made private landlords in some areas more reluctant to let to claimants.

“In some areas, offering incentives to private landlords may well be cheaper than using temporary accommodation, and a better option for the tenant than being stuck in a poor quality B&B.”1




Calls for benefit tenants’ rent to be paid to landlords

Published On: October 26, 2012 at 11:07 am


Categories: Finance News

Tags: ,

A recent move to pay housing benefits directly to landlords as opposed to tenants in Northern Ireland has provoked calls for the scheme to be extended throughout the U.K.

After lengthy discussions with U.K Minister Lord Freud, the Social Security Minister for Nothern Ireland has recently confirmed the move in a speech to the Assembly.

Important Change

In his address to members, Nelson McCausland was confident that the reforms would have a positive outcome. He said, ‘this is an important change as it will help to avoid rent arrears, with all the implications that can have for claimants and their families.’[1]

Calls for benefit tenants' rent to be paid to landlords

Calls for benefit tenants’ rent to be paid to landlords




At present, Local Housing Allowance is deposited directly to tenants. It is also commonly expected that the new Universal Credit will also be paid to tenants. This has drawn concern from many private landlords who feel that rent may not be passed onto them. Studies have also shown the many tenants would feel more comfortable with rent being given directly to their landlord.

Financial responsibility

Despite the concerns, Ministers from the Department of Work and Pensions argue that giving payments to tenants helps to improve their financial responsibility.

However, Chris Town, vice-chairman of the Residential Landlords Association, feels that the moves in Northern Ireland should be replicated in the rest of the U.K. Town said that, ‘With 9.1% of all rent in the private rental sector being in arrears, this is a situation which is simply not sustainable for either tenant or landlord.’

‘Both parties in the Coalition before the general election pledged to introduce direct payments to landlords. Organisations working with tenants including Shelter, Citizens Advice and the Money Advice Trust all support tenants having the choice to have their rent paid directly to landlords.’

‘The Government should get out of the way and trust tenants to know what is best for them.’

’If it’s good enough for Northern Ireland it should be good enough for the rest of the country.’[1]


The Northern Ireland Assembly has also given the green light to rules that give councils the opportunity to build registers of landlords and in their operational areas. Head of Policy and Public Affairs at the Chartered Institute of Housing Northern Ireland Jennifer Donald, welcomed the move. Donald said, ‘The private rented sector has grown really rapidly here. It is now bigger than the social rented sector by 2% to 3%.’

‘These regulations are important, primarily to help us get a better sense of the private rented sector.’[1]