Over half of private tenants relying on Universal Credit to pay their rent have a shortfall between the amount they receive and what they pay for their housing, according to the National Association of Residential Landlords (NRLA).

The landlords trade body said that the shortfall comes a year after the government froze housing benefit rates.

It pointed to official data stating that 56 per cent of private renters relying on Universal Credit have an average gap of £100 a month between the amount they receive in housing cost support and the rents they pay.

Six in 10 renters with two children relying on Universal Credit to help pay their rent have a shortfall between their rent and the benefits they receive.

Why is this happening?

The Local Housing Allowance is used to calculate the amount tenants can receive to support housing costs as part of a Universal Credit payment. The Government lifted it in April 2020 so that it covered the bottom 30 per cent of private rents in any given area. In April last year the rate was frozen in cash terms.

As a result of the freeze, housing benefit support is no longer linked to current rents. It means the number of properties that private renters in receipt of Universal Credit can afford will steadily decline.

The NRLA is calling on the Government to unfreeze the Local Housing Allowance to cover average rent.

Ben Beadle, chief executive, said: “It is simply absurd that housing benefit support fails to reflect the reality of rents as they currently stand. All the freeze is doing is exacerbating the already serious cost of living crisis.

“The Chancellor needs to listen and respond to the concerns of both renters and landlords and unfreeze housing benefits as a matter of urgency.”