Benefit shortfall leaves families without enough money to pay the rent

Half of the families privately renting depend on benefits to pay rent, but campaigners warn this isn’t enough.

According to Generation Rent, there has been a 23% increase in families relying on benefits to afford their rent. This means that half of all families renting privately need benefits to afford their rent. Using data from the Department for Work and Pensions, Generation Rent calculated this included 1.82m children.

However, the campaign group found that one in five families privately renting do not get enough in benefits to cover their rent.

Alicia Kennedy, director of Generation Rent, said:

After the country went into lockdown, 169,000 families claimed Universal Credit for the first time, and found that it doesn’t cover the cost of average rents. With thousands more about to be hit by the benefit cap in the run up to Christmas, rent arrears will keep on growing.

Local Housing Allowance

The total number of households on Universal Credit increased from 2.7m in March 2020 to 4.6m in August.

Despite 51% of families privately renting being reliant on benefits, Local Housing Allowance (LHA) only applies to the least expensive third of homes in a local area. This leaves 21% of families without enough income to pay their rent.

Due to the benefit cap, a significant number of families do not receive the highest amount of LHA. Some claimants have been exempt from the benefit cap for a nine-month ‘grace period’. However, this grace period will be coming to an end soon for March claimants.

This come as charities have been campaigning against cutting the £20 uplift in Universal Credit in April 2021.

The rent debt crisis

Generation Rent is petitioning Rishi Sunak to increase support for renters in the upcoming Spending Review.

It’s requesting an increase in LHA, the end of the benefit cap, and a more inclusive eligibility criteria for benefits. It’s also called for the chancellor to issue grants to help renters get out of debt.

Kennedy said:

Savings have already been bled dry by the first wave, forcing many tenants to rely on credit. Without further support, families are being forced to go without essentials, take out a loan to pay the rent, or risk eviction.

With so many private renters now reliant on it, the Government must ensure the benefits system covers housing costs. Everyone deserves the security of a home they can afford while we recover from the economic impact of coronavirus.

Featured image via YouTube/The Telegraph & pxfuel