Housing benefit fails to cover private rents for 50,000 Welsh households

Nation.Cymru staff

Around 50,000 households in Wales are receiving housing benefit that does not cover their private rent, according to research by Citizens Advice.

Blaenau Gwent, Pembrokeshire and Caerphilly have the highest proportions of households facing a shortfall across England, Wales and Scotland.

Support falls below rent costs for 79% of private renting households receiving it in Blaenau Gwent and 77% in both Pembrokeshire and Caerphilly.

Separate figures from property firm Hamptons put the average monthly rent for a newly agreed tenancy in Wales at £888, up 2.5% over a year.

Citizens Advice is calling on the UK Government to use the Autumn Budget to unfreeze Local Housing Allowance (LHA) and restore its link to the cheapest 30% of rents in each local area.

LHA determines the maximum housing support available to most eligible private renters, including those receiving help through Universal Credit.

Rates have been frozen since April 2024 and are based on rental data from September 2023. Citizens Advice analysis of Office for National Statistics figures suggests private rents in Wales rose by 20% between September 2023 and July 2026.

Luke Young, head of policy at Citizens Advice, said: “The freeze on the Local Housing Allowance hits Wales hard. It should be a red alert to MPs that the top three areas where housing benefit is least likely to cover private rents are all in Wales.

“The cost-of-living crisis is punishing households everywhere, but the chasm between housing benefit and the cheapest rents is driving up inequalities here in Wales.”

Across England, Wales and Scotland, the charity found that 58% of private renting households receiving housing support did not receive enough to cover their rent.

Almost one million households faced a shortfall – nearly 300,000 more than in May 2024.

Analysis

The findings draw on Citizens Advice analysis of Department for Work and Pensions Universal Credit data. Although the number of households receiving support increased over that period, the charity said the number facing shortfalls grew proportionately faster.

Hamptons’ separate lettings index found that annual rent growth on new tenancies across Britain accelerated for the tenth consecutive month in September, reaching its fastest pace in nearly two years.

Average newly agreed rents rose by 2.7% to £1,433 a month, compared with £1,396 a year earlier. The index tracks achieved rents rather than advertised prices, using data from the Connells Group.

Aneisha Beveridge, head of research at Hamptons, said: “So far this year, higher rents have mainly been felt by tenants moving home.

“But if growth continues to pick up, it is likely to feed through to more existing tenants in the coming months as the gap between new and existing rents widens.”

Private renters

Private renters receiving Universal Credit who sought debt advice from Citizens Advice had an average monthly budget deficit of £69.97 – 20 times that of their counterparts in social housing.

In a separate UK-wide survey, one in five private renters receiving Universal Credit said difficulties affording essentials affected their ability to find work or increase their hours.

Among those who had cut back on or stopped paying for childcare, 53% said they had reduced their working hours or stopped working as a result.

Mr Young urged the UK Government to act, warning: “If it doesn’t, too many households don’t stand a chance of ever emerging from the cost-of-living crisis.”

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