Housing benefit rise will see 1.6m private renters gain

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The government has revealed details of how its unlocking of housing benefit will see 1.6 million private renters net a £7bn boost over the next five years.  

New Local Housing Allowance rates due to come into force in April as legislation is being laid before parliament, says the Department for Work and Pensions.  

It points out that private renters on universal credit or housing benefit will be around £800 better off a year.  

The department adds that the move comes as national insurance — to be cut from 12% to 10% — will see households with two average earners save nearly £1,000 per year.  

The department says the increase in support for renters will mean:     

  • A four-bedroom property in Bristol could get up to £1,850 per month  
  • A two-bedroom property in Greater Glasgow could get up to £850 per month  
  • A one-bedroom property in Leeds could get up to £675 per month  

The move comes after Chancellor Jeremy Hunt said he would unblock housing benefit, raising it to match the bottom 30% of local market rents for the first time in three years at the Autumn Statement last November.  

Housing benefit has been frozen at the same level since March 2020.    

Groups as disparate as landlord associations and housing charities have long called for a rise of this benefit to stop low-income households from being forced out of their lets. Some bodies called for an immediate uprating at the time.     

This investment comes on top of the £30bn the government will provide over 2023/24 for housing support.    

Work and Pensions secretary Mel Stride says: “Housing costs are the number one expense for families. This £1.2bn boost to Local Housing Allowance [over the coming tax year], along with our landmark Back to Work reforms, reflects our fair approach to welfare – helping people into employment while protecting the most vulnerable with unprecedented cost-of-living support.”  

Crisis chief executive Matt Downie adds: “In recent years, people receiving housing benefit have found it increasingly difficult to afford the soaring cost of rents. Giving housing benefit this crucial boost will make a real difference to people across Great Britain and will relieve some of the pressure facing people on the lowest incomes.  

“We hope this investment will be maintained for the long term, so we can continue with our collective mission to end homelessness for good.”  

Housing charities have warned that rising rents and cost-of-living expenses will eat into the benefits rise.  

In the year to October, average UK private rents rose by a record 6.1%, according to the Office for National Statistics.   

In London, average annual rents lifted 6.8% over the same period, also a record.