Housing benefits do not pay for all of rent

Due to the housing benefit freeze, as well as increasing housing costs, Hundreds of thousands of families in the UK who rent in the private sector are having to come up with extra money each month to pay their bills. The shortfall in housing benefits is referred to as the “rent gap”.

It is estimated that as many as 400,000 families need to come up with extra funds each month above and beyond what they budget. The problem has been getting worse since 2016, since housing benefits have been frozen (along with other welfare schemes) by the central government.

The gap is over £2400 per year

As everyone knows, the cost of housing across the UK has been increasing faster than wages. In the East, Southeast, London, and Southwest, tenants pay more than 30% of their income towards rent, and in London it is 50% of their income. This is when hundreds of thousands of tenants need to turn to government welfare benefits for housing – as their low income does not allow them to pay 30, 40, or 50% of their already low wages for housing.

But local housing allowance (LHA) is failing them. Even when they get this benefit, they need to pay more of their own income (whatever its source) for rent. They need to come up with an additional £2400 or £200+ per month on average to fill that gap. That additional spending takes away from their food budgets, transportation, energy bills, job costs, cloths, and other critical bills.

This data on the estimated 400,000 people whose housing benefit is not enough for their rent was been collected by Shelter, the non-profit that focuses on housing issues. However other data supports this too.

How are tenants freeing up money to pay the rent?

It comes to determining which bills to pay or not pay. Each person will often take a different approach. The data from Shelter shows that other basic needs are being cut back. About 33% of the families in the UK have reduced their monthly grocery budget. 30% are trying to save money on utility bills, mostly heating, by keeping their home colder. Others cut back on clothes, furniture, and possessions.

Another way that tenants are closing the £200 per month gap is by trying to increase their income by selling stuff. They may sell their furniture, jewelry, family heirlooms and other items. But that is a short term relief as eventually possessions are all sold.

Government or charitable assistance for closing the rent gap

The 400,000 families have limited options when it comes to financial aid. The main reason is that any rent help is short term only. The tenant needs a long term sustainable solution to cut back 200 pounds per month or make that money through higher income or finding a roommate or something else.

However, anyone who wants to explore rental arrears schemes or council schemes can look into them for a grant or loan. As there may be some short term crisis financial aid.