Housing benefit UK: families on Universal Credit priced out of rental market - how your area compares

Housing benefit claimants are unable to afford private rents across large swathes of Britain, following a housing benefit freeze (Image: NationalWorld/Kim Mogg)Housing benefit claimants are unable to afford private rents across large swathes of Britain, following a housing benefit freeze (Image: NationalWorld/Kim Mogg)
Housing benefit claimants are unable to afford private rents across large swathes of Britain, following a housing benefit freeze (Image: NationalWorld/Kim Mogg) | NationalWorld/Kim Mogg
Rents in large parts of Britain are unaffordable for those on housing benefit leaving struggling families facing a shortfall during the cost of living crisis, an investigation has found.

Trying to find a safe home if you are on a low income in the UK has become like “trying to find a needle in a haystack”.

Those are the words of Polly Neate, chief executive of housing charity Shelter, after an investigation found that large swathes of Britain are completely unaffordable to renters on Universal Credit or housing benefit.

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A whopping 98% of two-bedroom rental properties listed on Rightmove during July had rents that outstripped their area’s Local Housing Allowance rate – the maximum rate of housing benefit people receive, or the portion of Universal Credit meant to cover rent – according to research by the Bureau of Investigative Journalism on behalf of Channel 4 Dispatches, which analysed more than 40,000 adverts.

It means families face having to make up the rent shortfall with their other benefits or income – at a time when rising energy and food bills are squeezing household finances ever tighter.

The researchers also found that landlords were continuing to discriminate against those on housing benefit, or to make it difficult for them to rent from them. Two agencies approached in Scotland said the landlord would not let to somebody on benefits. The practice is banned in England following a 2020 legal case brought by Shelter under the Equality Act (legislation which applies UK-wide), but the situation is less clear in Scotland.

Analysis by Dispatches meanwhile has found the number of families who are homeless or at risk of homelessness has gone up by 22% in 12 months. In a documentary airing on Friday 7 October, the Dispatches team will follow the story of Bella, one of over 120,000 children living in temporary accommodation in Britain, after her family was evicted from the only home she had ever known.

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What did the findings show?

The Bureau of Investigative Journalism compared the prices of two-bedroom properties against two-bedroom Local Housing Allowance rates for 148 areas across Great Britain where they were able to gather listings data for at least 50 properties during July.

In 19 different areas –  including Chesterfield, Eastern Staffordshire, Swindon, Ipswich and South Devon – they did not find a single affordable property, while 22 areas, including the major cities of Bristol and Cardiff, saw just one affordable listing each.

NationalWorld/Kim Mogg

The amount of Local Housing Allowance a renter can get is based on the Broad Rental Market Area they live in (Britain is divided into 194 of these), and the number and ages of people in their household.

A range of family types are entitled to the two-bedroom rate, including:

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  • A single parent with a dependent child
  • A couple with a dependent child
  • A single person or couple with two dependent children. If one of the children is aged between 10 and 15 they must be the same sex (if they are not, the family is entitled to the three-bedroom rate). If they are both under 10, they can be mixed sexes. 

In April 2022, then-Chancellor Rishi Sunak set Local Housing Allowance rates at a level that would cover the cheapest 30% of properties in the local area. But rates have been frozen since then, despite rents rising across the country.

The Local Housing Allowance would have to be raised by hundreds of pounds per month in some areas if it were to cover the cheapest 30% of properties analysed by the researchers. These include Brighton and Hove (£449.99 increase needed), Winchester (£434), Bristol (£375.01), Bath (£349.98), Bournemouth (£340.02), Chichester (£325.01), High Weald (£300.01), Central Greater Manchester, Cardiff and Bury St Edmunds (all £275) and Birmingham (£259.98).

You can find out what the Local Housing Allowance rate is in your area, and what the shortfall is against actual rents, in the table below.  If you do not know what your local Broad Rental Market Area is called, you can look it up here. Can’t see the table? Click here to open it in a new window.

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Wales had the worst results in the investigation, with just 1% of properties affordable for claimants (only seven out of 670 listings analysed nation-wide). That was followed by England at 2% and Scotland at 9%.

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Even the local areas where the most affordable properties were found fell far short of the ambition for the rate to cover the cheapest 30% of properties. In North Cumbria and in Aberdeen and Shire, 15% were affordable, as were 14% in West Cheshire.

The Local Housing Allowance rate looked at the bottom 30% of all rental properties in the area back in 2020, not just newly advertised properties. But the results still suggest benefit claimants in need of a new home are priced out based on current market conditions.

You can look up the results for your Broad Rental Market Area in the table below. Can’t see the table? Click here to open it in a new window.

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How easy is it to rent in the private rented sector?

With almost 1.2 million households languishing on council housing waiting lists in England alone at the end of 2020/21, for many people on a low income or benefits the private rented sector is their only hope of finding an available property.

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But the Bureau’s research also found additional barriers for benefit claimants, even if they were able to afford the cost of rent.

Of 100 landlords or agents advertising properties affordable to those on benefits, only 10 responded with a clear answer when contacted to ask if they would consider letting to someone in receipt of benefits. Of these, two said the landlord would not rent to them, five said the the renter would need a guarantor, and one said they would need to earn 30 times the monthly rent annually.

Only two explicitly said they would rent to someone on housing benefit, although one of these said they would have to provide evidence of an annual income of at least £18,000.

For one property advertised in Wirral at a price of £525 per month, the agent or landlord said the applicant would need one month’s rent in advance, a £100 holding deposit, a £500 deposit, and a guarantor who is a UK resident and either works full time or owns their own home.

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In Redcar and Cleveland, one landlord or agent said they would consider renting to someone on benefits only if they had a “fully paying guarantor” with an annual income of at least £15,750. The rent would have to be taken directly from the guarantor’s bank account.

What do the experts say?

Shelter says the housing benefit safety net – meant to stop people becoming homeless – is not working, with a freeze at 2020 levels “leaving renters desperately trying to make up the shortfall”.

“Record-high private rents and rocketing prices are leaving even more renters fighting to keep a roof over their heads,” said chief executive Polly Neate. “The housing emergency is at the core of the cost of living crisis, but it is being ignored.

“The new Prime Minister needs to get a grip on housing before even more people lose their homes this winter. Housing benefit must be restored, otherwise struggling families, who’ve got nothing left to cut back on, will have no hope of paying private rents.”

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Acorn, the tenants’ union, says discrimination against housing benefit claimants remains an issue despite a ruling that to do so is illegal in England under UK equality law.

“It’s often difficult to prove [direct discrimination], and enforcement from local authorities is lacking,” said Anny Cullum, policy and research officer for the union. “These findings also make it clear that rents are far too high. If the Government is serious about getting a handle on the growing housing crisis, they need to work to bring down spiralling rents which are increasingly inaccessible to many people.”

Britain’s Evicted Kids: Dispatches is on Channel 4 on Friday 7 October at 7:30pm

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