The National Residential Landlords Association (NRLA) is calling on the government to unfreeze housing benefits rates to provide tenants and landlords with the security that rents can be paid, amidst the cost-of-living crisis.
The NRLA estimates that more than 820,000 private rented households in Britain are currently experiencing a shortfall between their housing benefit payment and their monthly rents.
This is based on official data showing that of all private rented households in receipt of the Local Housing Allowance over half, 57%, have a shortfall.
Regionally, the proportion of private rented households affected ranges from almost 41 per cent in London, although it is important to recognise that this is based on a much higher number of claimants, through to 69% in Wales.
The figures come as the Office for Budget Responsibility (OBR) has warned that housing-related benefits spending is expected to rise by just 0.1% of GDP by 2025 – five years on from the start of the pandemic and the recession it caused.
The OBR notes that this is the smallest increase seen in any of the four recessions seen since the early 1980s.
Despite private rents increasing by less than inflation, the NRLA is warning that vulnerable renters face a perfect cost of living storm. It is being worsened by housing benefit rates having been frozen since April 2021, rising energy and food prices and a chronic shortage of private rented housing which is set to drive up rents.
Ben Beadle, chief executive of the NRLA, said: “Vulnerable renters are facing a perfect storm of rising costs matched by a benefits system that is failing to keep up.
“Whilst the chancellor’s one-off pots of money to support households are welcome, these cannot be used to hide the deficiencies of the benefits system. Landlords and tenants are dismayed at the Government’s chronic inaction to make the changes they desperately need.
“With inflation soaring we cannot wait any longer. The chancellor needs to do the right and logical thing by unfreezing housing benefits without delay.”
Dont worry, I’m sure Shelter, Generation Rent and the like will help those in need with their shortfalls….
oh wait.
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Interesting sentence here “Despite private rents increasing by less than inflation”. This can’t be true! I thought that according to Shelter and their pals all PRS landlords were evil money grabbers who would be expected to hike rents until the tenants pips squeaked! In fact many tenants are being insulated from inflation pressure on their rent by their landlords. This not altruism it is realism. Good tenants are hard to find and they are costly to replace. First there is the void period to contend with (maybe not so much of a problem these days), you will also need to do some renovation even after a good tenant. Then you need to find a new tenant, pay for all the referencing to be done on tenants and any guarantors and get right to rent checks done. Even then your shiny new tenant could turn out to be a nightmare and fully protected by law could stop paying rent and essentially steal your house from you and live in it rent free for months while you go through the worry and expense of getting them out of your now wrecked house. So you don’t want to upset a good tenant by greedily hiking rent.
Of course there will be point at which landlords can no longer absorb costs and must pass them on but most of us resist as much as we can. Maybe there is a bit of altruism in the realism after all.
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