Housing benefits only cover cheapest 18% of private rental market, new research reveals

With private rents continuing to rise, JRF noted that the effective LHA rate will have fallen even further since then. In 2011, 50% of rentals were covered by housing benefits.

The researchers said that effective LHA rates varied widely across local areas. Areas where benefits were most insufficient were: central London, with one in 50 private two-bedroom properties covered; Tameside and Glossop (5% of homes covered); Yeovil (7%); St Helens; (7%) and Bury St Edmunds (8%).

While the 2020 uplift of LHA rates saw the number of families facing shortfalls between rents and benefits fall from two-thirds to a half, the freeze in support has seen the share of families facing shortfalls climb again, reaching 58% by September 2022. Families without the means to make up the shortfall will increasingly be squeezed, JRF said.

According to the Institute for Fiscal Studies, in the first quarter of 2023 just 5% of private rental properties listed for rent would be covered by LHA. Analysis by Savills and the London School of Economics found that this was even lower in London, with just 2.3% of properties listed for rent throughout 2022-23 covered by housing benefits.

JRF estimated that more than eight in 10 low-income private renters in receipt of housing benefits or Universal Credit were going without essentials and seven in 10 were experiencing food insecurity in the past 30 days, cutting back on food or going hungry. Over half were paying more than 40% of their income on rent.

Alongside JRF, housing associations and homelessness charities have urged the government to unfreeze LHA and realign it with a higher percentage of market rents.