The National Residential Landlords Association (NRLA) has expressed concern about the uncertainties faced by millions of people in the private rented sector (PRS) regarding a lack of clarity from the main political parties on housing benefit rates.

More than 1.5 million households renting privately in Britain receive Universal Credit, which includes support for housing costs through the Local Housing Allowance (LHA). However, NRLA analysis of government data indicates that two-thirds of these households experience a shortfall between their LHA payment and their monthly rent.

In April 2024, the LHA rate was again set at the lowest 30% of rents in any given area. This followed a freeze introduced in April 2020, which caused benefit rates to become detached from market rents. According to the Institute for Fiscal Studies, this resulted in only 5% of private rental properties being affordable for those receiving LHA.

The Institute for Public Policy Research has warned that even with the LHA rate unfrozen, over 800,000 households on Universal Credit will continue to face shortfalls between their housing support payment and the rent they pay. The situation is expected to worsen, as LHA rates are scheduled to be frozen from April 2025.

None of the main political parties have committed in their manifestos to permanently linking housing benefit rates to the bottom 30% of rents for the duration of the next Parliament. By failing to do so, they ignore recommendations made by the cross-party Work and Pensions Select Committee and leave those living and working in the private rented sector struggling to plan for the future.

Ben Beadle, chief executive of the National Residential Landlords Association, stated: “It is time to fix the broken housing benefit system once and for all. The lack of clarity about support in the future is causing insecurity and anxiety for renters and landlords alike. It undermines efforts to sustain tenancies and prevent homelessness in the first place."

He added, "The lack of any pledges to address this issue by the main parties is unacceptable. The next government must confirm that housing benefit rates will permanently track market rents. This would provide the assurances needed that support would keep pace with the cost of housing.”

In summary, the NRLA’s findings highlight a significant issue within the PRS, exacerbated by the lack of clear policies from political parties regarding housing benefit rates. Without decisive action, instability will continue to affect both tenants and landlords.