Half of all private renting families now rely on benefits to pay the rent

Nov 19, 2020 12:01 PM

The coronavirus has had a devastating impact on families living in private rented homes. Over half are now reliant on benefits to pay the rent – including 1.82 million children. That’s an increase of 23% since February.

Yet, one in five families renting from a private landlord currently receive less in benefits than they need to pay their rent, our research has found. This leaves 378,000 families in England with a shortfall. More disturbingly, this figure includes 750,000 children living in households with this shortfall.

Since the country went into lockdown in March, 169,000 families have claimed Universal Credit for the first time, according to government figures, and they saw for themselves the many shortcoming of our welfare system.

First, Local Housing Allowance only covers the whole rent for the cheapest 30% of homes in a local area. Just over half of families (51%) are relying on LHA to pay rent, which means that around 21% of them are in homes that cost more than the maximum LHA. They will either be cutting back on essentials, dipping into savings or borrowing money to pay rent - or getting into arrears and facing eviction.

Renters unable to afford their rent may try to move to a cheaper home, but discrimination against benefit claimants remains widespread, shutting this option off to many. 

To make matters worse, many families will not get the full Local Housing Allowance because of the household benefit cap. Many new Universal Credit claimants have been exempt from the benefit cap, but this grace period only lasts for nine months, and people who applied for Universal Credit in March will be nearing the end of it around Christmas.

Generation Rent is calling on Rishi Sunak to end the rent debt crisis in the Spending Review on 25 November by:

  • Raising LHA to cover median rents
  • Scrapping the household benefit cap and widening eligibility for support, and
  • Providing grants to clear rent arrears built up in the first wave of the pandemic by compensating landlords up to 80% of the rent

Coronavirus has had a devastating impact on the finances of families living in private rented homes. With thousands more about to be hit by the benefit cap in the run up to Christmas, rent arrears will keep on growing. 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.

Sign our petition to end the rent debt crisis here

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