Almost one million private renting households face a shortfall between their housing benefit and their monthly rent, according to new research from Citizens Advice, which is urging ministers to unfreeze Local Housing Allowance in the Autumn Budget.
The charity found that 58% of private renting households receiving housing support across Great Britain cannot cover their full rent with the benefit. That share has risen by almost 300,000 households since May 2024, when the government last increased housing support.
Housing benefit has fallen behind rents since 2024
Local Housing Allowance sets how much support eligible private renters can receive through Universal Credit or Housing Benefit. Rates were originally linked to the cheapest 30% of private rents in each local area, but the government last updated them in April 2024 using rental figures from September 2023.
Since then, rents have risen by an average of 18% in England and 20% in Wales, according to Citizens Advice, leaving support lagging further behind actual rents. The charity estimates that around 900,000 affected households live in England, with another 50,000 in Wales.
Tom MacInnes, director of policy at Citizens Advice, said: “People are caught between a rock and a hard place, struggling to afford housing near their work or children’s school, or dealing with poor transport links and high travel costs to live where rent is cheaper. The cost-of-living crisis is punishing households everywhere, but the chasm between housing benefit and the cheapest rents is pushing households to the brink and driving up regional inequalities. That’s why the government must unfreeze housing benefit and link it back to local rents.”
Citizens Advice surveyed more than 130 of its frontline advisers. Some 45% said they had helped tenants facing higher housing costs to live closer to work, while 22% had helped people move further from employment opportunities to find cheaper accommodation.
This follows Residential Landlord’s report on Resolution Foundation analysis showing the gap between housing support and rents was on course to hit a record 23% in October. The Citizens Advice figures confirm that shortfalls are still widening rather than levelling off.
Wales and the North East face the widest shortfalls
In Wales and the North East, nearly seven in ten private renting households receiving housing benefit face a rent shortfall. The three worst-affected areas are all in Wales: support fails to cover rent for 79% of recipients in Blaenau Gwent and 77% in both Pembrokeshire and Caerphilly. On the English side, 68% of recipients face shortfalls on the Fylde Coast, compared with 66% in Sunderland.
For landlords, the pattern points to rising arrears risk among benefit-dependent tenants, longer void periods where asking rents sit far above supportable levels, and harder conversations at renewal. Earlier analysis of frozen support warned of widening arrears risk for older renters and their landlords, and the new figures suggest younger working households are being pulled into the same trap. The charity’s full briefing on the Local Housing Allowance freeze sets out its Budget ask in detail.
Opinion
Ministers uprated support in 2024 and watched rents sprint away from it within two years. If the Budget leaves the freeze in place again, landlords will carry more of the arrears risk while tenants fall further behind. Restoring the link to local rents is the honest fix.
