I walked down the street recently and, passing an estate agent, had to double-check the price I saw advertised. Two properties for rent had been priced at over £1000 per calendar month (pcm). Wondering if it was just this agent asking for such steep rents, I checked online websites, focusing on my local area and wider county. To my horror, the lowest rent (excluding houses in multiple occupation, HMOs, and house shares) was rarely below £600pcm – usually above £800, reaching over £1000 in some cases.
With an upcoming rental review, another Spring Budget in which Local Housing Allowance (LHA) is being frozen, and currently out of work due to health, my mind is focused on the increasing amount I spend on rent each month. My Housing Element of £400pcm leaves me with a shortfall of £400, which regularly comes out of my PIP payment. If I didn’t receive PIP I’d fall from the one-bedroom rate to the shared bedroom rate for people under-35. That would drop my award to £300 a month.
In the line of fire
LHA is aimed at supporting people in the private rented sector who receive Housing Benefit or the Housing Element of Universal Credit. However, the regular freezing of rates has created a gap between it and the real cost of rent. Along with rates being based on the 30th percentile of rents, this can mean LHA covers less than 50% of rent.
Though rates vary depending on your county, the situation remains the same. Continuing to freeze LHA while rents continue to rise makes the cost-of-living crisis harder for those who depend on it.
With people needing to allocate an ever-increasing portion of income to rent, those affected most by frozen LHA are often from groups austerity already impacts most. This includes under-35s who, unless they meet specific criteria, will only be allocated the shared-room rate, even if they live in a single bedroom or studio flat.
This could be an added stressor to young people, especially those wanting to move out for the first time. They may decide to stay in their family home longer, rather than risk leaving and struggling to cope due to unforeseen circumstances such as a job loss. When things are so tight a single event can be disastrous.
Another affected group is single parents, particularly those with multiple children of similar ages. Though they qualify for the single bedroom rate regardless of age, the number and ages of children can lead to the amount being paid not matching the rent for an appropriate home.
LHA rules state that children under 10 can share a room regardless of sex, children of the same sex until 16. Not only can this lead to families being awarded a lower rate of LHA than needed, it could also cause additional tensions – especially if teenagers are expected to share with much younger siblings.
Health and other extra pressures
The way LHA was set up, and has remained since 2013, also impacts on disabled people. Tight budgets may be pressed even further due to the shortfall between the awarded amount and rent, and people in receipt of benefits both in and out of work. This financial pressure during a cost-of-living crisis, along with lack of affordable housing and waiting lists for social housing being over 10 years in many places, can leave private renters no alternative other than moving to a new area entirely.
Move, rent rises, leave, repeat. In years past people were sometimes able to find slightly more affordable places to rent in the same area, or at least the same county. But this is increasingly difficult.
While this can potentially help ease the financial burden created by high rents, it can cause other issues that may not have been present previously.
As someone supported by mental health services in my county for over 15 years, both via the NHS and through charities such as Mental Health Matters Wales, I’ve been able to create a support network to help manage my mental health conditions effectively. However, I’ve had to consider leaving the county, presenting me with the daunting prospect of seeking similar services in a new area – services that possibly don’t exist there. This would be a concern for anyone with a disability or long term health condition who relies on community-based support to manage daily life.
Tear it up and start over
Another issue with people having to leave their local area is the difficulty that arises in creating a sense of community. This could be through people having to leave community groups that they’ve been involved in, or those running them having to stop holding in-person meetings, potentially closing the groups entirely.
Because of this people can become more isolated socially and feel unsupported, which contributes to the ongoing mental health crisis and loneliness epidemic in Wales and the UK. While these issues affect all age groups, they impact people aged 16–34 most.
As the Welsh Government has rejected the introduction of rent controls, there must be changes to l LHA itself if it’s serious about meeting the housing needs of people across Wales. One aspect that should be removed entirely is the shared-room rate, which puts young people at a disadvantage overall and further impacts disabled young people who don’t have a qualifying benefit. M LHA should start at the one-bedroom rate, allowing single people of all ages to have an equitable level of support when renting.
Another option could be to apply the rules currently used for social housing when calculating the amount paid towards rent. Commonly nicknamed the ‘Bedroom Tax’, your rent would normally be matched by the Housing Benefit or Housing Element of Universal Credit if you live in a property with an appropriate amount of bedrooms. However, if you have a spare bedroom the amount is reduced by 14%, or by 25% for two or more spare bedrooms.
Win-win
Average UK private rents increased by 9.0% in the 12 months to December 2024 (provisional estimate). This was down from 9.1% in the 12 months to November 2024 and was below the record-high annual rise of 9.2% in March 2024.
Office for National Statistics
While not an ideal system, the set levels of reduction could mean a more manageable shortfall. There’s also no shared-bedroom rate, with the minimum rate being a single bedroom.
This system would not only provide more financial security to people but encourage them to stay in their communities for longer and engage in local events. In addition to tackling loneliness and providing better community support for those struggling with their health, it could empower people to address gaps. For example, there are few LGBTQIA+ groups outside of cities like Cardiff.
Feeling secure enough in your housing and enabling you to do this would not only benefit people on an individual level, but help address the issues facing society as a whole.
The Prime Minister, currently gunning for £6bn cuts in benefits to sick and disabled people, says the system is “the worst of all worlds”. He’s right, but not in the way he seems to think. It’s unnecessarily complicated, stressful, challenging, and damaging to individuals, communities, and society as a whole, not the supportive system it should be. But there are some reasonably easy fixes even within that flawed system if one just looks beyond ‘growth’.
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