The pandemic, job losses, and rising rent prices has meant that many tenants need benefits to help pay their monthly housing bills.
At the same time, affordable social housing has become scarcer, leaving many households with no choice but to rent in the private sector – often paying more than they would for a mortgage. According to the latest HomeLet Rental Index (March 2021), the average rent in the UK is now £922, up by up 3.4% on last year. When London is excluded, the average rent in the UK is now £847, up 6.8% on last year. Ten of the Twelve regions showed an increase in annual variance, with the largest, as last month, being the East Midlands at 10.5%. The South West shows the highest yearly increase of 8% between January 2020 and January 2021.
In March 2020, the Local Housing Allowance (LHA) was increased to cover the bottom 30% of rents, but from April this year, it will be frozen again in cash terms, meaning the gap between rental costs and support available will start to widen again. The Joseph Rowntree Foundation wants the government to reverse its decision to freeze LHA so that it is recoupled to the real cost of renting.
Darren Baxter, housing policy and partnerships manager at the Joseph Rowntree Foundation, said: “The economic fallout from the pandemic has left millions of families worried about paying rent. The government should immediately introduce a targeted package of grants to support renters in arrears, ensuring that they can stay in their homes.”
One industry expert said that housing support in the benefits system needs to reflect the average cost of renting in any given area.
Mish Liyanage, CEO of Pick My Pad, said: “Many tenants on benefits are seeking affordable accommodation in the private sector and landlords should be embracing them. However, it is vital that landlords educate themselves with the requirements for DSS tenants.”
He added: “For those landlords that are new to social tenants, it is important to understand the housing benefit system and payment cycle. LHA councils pay tenants two weekly, four weekly or calendar monthly so there is little point in a tenancy agreement that demands a payment on different dates.”
According to Llyanage, the one-bed rate under Bolton council is £90.90. But go a little further down the road to Salford, he says, and the rate is £138.08.
This post has originally been featured in Property Wire.