Almost one million private renting households across Great Britain face a shortfall between their housing benefit and monthly rent, according to new research from Citizens Advice. The charity found that 58% of private renting households receiving housing support cannot cover their full rent with the benefit, a figure that has risen by almost 300,000 households since May 2024, when the government last increased housing support.
Citizens Advice is now urging ministers to unfreeze Local Housing Allowance (LHA) in the Autumn Budget. The warning comes as rising rents continue to put pressure on low-income tenants, increasing the risk of arrears.
Housing benefit falls further behind rents
LHA rates determine how much housing support eligible private renters can receive through Universal Credit or Housing Benefit. The rates were originally linked to the cheapest 30% of private rents in each local area. However, 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. As a result, housing support has fallen further behind actual rental costs. The charity estimates that around 900,000 affected households live in England, with another 50,000 in Wales.
Wales and North East hardest hit
The research also reveals significant regional differences. 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.
In Blaenau Gwent, housing support fails to cover rent for 79% of recipients. The figure reaches 77% in both Pembrokeshire and Caerphilly. Meanwhile, 68% of recipients face shortfalls in Fylde Coast, compared with 66% in Sunderland.
Citizens Advice also identified a link between rent shortfalls and unemployment among benefit recipients. The charity said limited housing supply, employment opportunities and transport connections could help explain the pattern. In a survey of more than 130 frontline advisers, 45% reported helping tenants who faced higher housing costs to live closer to work. By contrast, 22% had helped people move further from employment opportunities to find cheaper accommodation.
Calls for Budget intervention
Citizens Advice wants the government to restore the link between LHA and the cheapest 30% of local rents. It argues that doing so would ease financial pressure on low-income renters and reduce regional inequalities.
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. If it doesn’t, too many households don’t stand a chance of ever emerging from the cost-of-living crisis.”
