Propertymark highlights issues with housing related benefits

The House of Commons Work and Pensions Committee has launched an inquiry to help inform current and future UK Government thinking on the adequacy of benefits and is also looking at the relationship between social security and the labour market.

Universal credit logo.jpg

Improving access to housing 

We drew the committee’s attention to the unfortunate reality that many people in receipt of benefits are excluded from some housing options in the private rented sector (PRS) due to the inadequacy of Local Housing Allowance (LHS) rates.

The current situation is that LHA rates have been frozen since 2020 and have not kept up with market rents. Drawing on research by the Bevan Foundation in Wales and Centrepoint in England, Propertymark highlighted the glaring gap between LHA levels and market rents and reaffirmed our call that LHA should be pegged at the thirtieth percentile if not the fiftieth.

Reform of Broad Rental Market Areas (BRMAs) could also reflect local areas rental areas more accurately. We also highlighted the important role that letting agents could play in improving the collection of rental data from the Valuation Office Agency. Rental data is collected by the VOA, which feeds into government statistics and insight such as LHA levels. Unfortunately, despite the importance of submitting data, landlords and agents appear reluctant to do so and we recommended that the committee look to overcome some of the potential barriers.

08 Mar 2023
Supplying rent data to the Valuation Office Agency

When agents and landlords supply the Valuation Office Agency (VOA) with rental data, they are contributing towards improving the quality of government data which helps landlords and tenants make accurate and informed decisions.

Making Universal Credit work for the PRS

The fact that Universal Credit (UC) has got some tenants into debt while waiting for the initial payment from the first five weeks, is completely unacceptable, and we recommended once again that the first payment should be made as an advance. Any claimants that find themselves in debt should receive a grant rather than a loan and direct payment of the housing benefit element of UC should be paid directly to landlords as the default option.  

Given the challenges to young people from the cost-of-living crisis, we called for a temporary suspension of the Shared Accommodation Rate and demonstrated the impact the Benefit Cap was having on large families, especially in high-rent areas such as London.

Improving communication between DWP and landlord and letting agent bodies

Prior to COVID-19, strategic communication between relevant PRS stakeholders and the DWP (Department for Work and Pensions) was strong. Understandably, during the pandemic, the DWP had to realign its priorities to front-line support. However, they continue to meet with social housing providers via a forum, and given the challenge of the managed migration of people in receipt of legacy benefits to UC, not to mention the impact of the cost-of-living crisis, we believe there has never been a more important time for the DWP to re-engage with stakeholders representing the sector.

Download the full consultation response