The Local Housing Allowance is used to calculate the amount tenants can receive to support housing costs as part of a Universal Credit payment
Over 60 per cent of private tenants in the north-west relying on Universal Credit to pay their rent have a shortfall between the amount they receive and what they have to pay.
Official data shows that across the region, 62 per cent of renters who receive housing benefit have a gap.
Government figures show that across the region the average shortfall between the support such tenants receive and the rent they pay is £86 ($109.42) a month.
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 increased the allowance in April 2020 so that it covered the bottom 30 per cent of private rents in any given area.
In April last year the rate was frozen in cash terms and remains frozen in 2022/23.
According to the National Residential Landlords Association (NRLA), as a result of the freeze, the link between local rent levels and the amount of housing benefit support received has been broken.
This means the number of properties that private renters in receipt of Universal Credit can afford is likely to steadily decline, they say – despite rents across the north-west having increased by less than inflation.
The NRLA’s solution is to call on the Government to unfreeze the Local Housing Allowance and so ‘restore the link between the allowance and the cost of local rents’.
Ruth Rowntree, Northwest Spokesperson for the NRLA, said: The benefits system fails to provide renters and landlords across the Northwest with the security they need.
Rowntree said: It cannot be right that housing benefit support fails to reflect the reality of current rent levels. The freeze merely exacerbates the already serious cost of living crisis for tenants across the region.
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