Homelessness charity Crisis is calling on the Westminster Government to stop the freeze on housing benefit as new statistics reveal rental properties across Wales are out of reach for those on the lowest incomes.

New data analysis by Crisis and property website Zoopla reveals that last year (March 2022 to April 2023) only 2% of rental homes on the market in Wales were advertised within housing benefit rates.

The statistics show that across the country, people on the lowest incomes and in receipt of housing benefit are left struggling to scrape together between £1,555 and £3,013 just to keep up with their rental payments each year.

The situation is even worse in Welsh cities, where families on the lowest incomes are facing impossibly difficult situations as they try to find the staggering £4,269 needed to bridge the gap between housing benefit rates and the real cost of renting a three-bed home.

As of May 2023, around 1 in 6 (41,376) rented households in Wales were reliant on housing benefit to afford to pay their rent.

Housing benefit rates have been frozen since March 2020 and are currently based on rental prices for 2018-2019. With the cost of living continuing to wreak havoc on household finances, Crisis says the Westminster Government’s persistent failure to increase housing benefit in line with real world costs will push more people into homelessness and destitution.

In March this year, an alliance of organisations known as Homes for all Cymru wrote to Jeremy Hunt urging for investment into Local Housing Allowance (LHA) in the Spring budget in light of research by the Bevan Foundation, but these calls were unmet. Crisis and others in the alliance are now urging the UK Government to address this longstanding issue in its Autumn budget.

Debbie Thomas, Head of Policy for Wales at Crisis, said: “It’s truly shocking that only 2% of rental homes are affordable to the tens of thousands of people who need housing benefit to pay their rent.

“People can be pushed into homelessness for all sorts of reasons, but an inability to find a genuinely affordable property within housing benefit rates is certainly leaving many in precarious housing situations.

“It’s been more than three years since housing benefit was last increased and as the cost of living crisis continues to bite, more people are left priced out of a home. This cannot continue. The UK Government needs to get with the times; it must act now to update housing benefit rates and prevent more people from being pushed into homelessness this winter.”

Richard Donnell, Executive Director of Research at Zoopla, said: “Demand for rental homes is high as rising mortgage rates place home ownership out of reach for many.

“Acting now to reset housing benefits would make a massive difference to people in Wales and across the UK who face housing insecurity as they simply cannot afford to bridge the wide gap between the benefits available to them and real rents.”

Ruth Power, Chair of Homes for all Cymru and CEO of Shelter Cymru, added: “The inadequacy of housing benefit is pushing people into poverty and keeping people homeless. It is nigh on impossible to find somewhere affordable to live if you are a private renter who is reliant on housing benefit.

“In the midst of a cost of living crisis, the UK Government must listen to the growing call to unfreeze LHA otherwise they risk consigning thousands more people to homelessness.”

Proportion of private rental sector homes affordable to people across Wales on housing benefit, 2022-23*

Area*	% 1 beds below LHA	% 2 beds below LHA	% 3 beds below LHA	% 1-3 beds below LHA
WALES	3%	1%	1%	2%
Urban	4%	0%	3%	2%
Valleys	1%	1%	0%	0%
Rural	1%	2%	1%	1%
Other	2%	2%	1%	2%

 

Average annual shortfalls between listed rents in Wales and LHA rates, 2022-23

Area*	1 bed	2 bed	3 bed
WALES	£1,555.74	£2,246.56	£3,013.58
Urban	£1,736.19	£3,062.90	£4,269.18
Valleys	£1,532.07	£2,376.13	£3,058.00
Rural	£1,573.06	£1,998.87	£2,646.87
Other	£1,439.96	£2,073.02	£2,875.87

For further information please contact media@crisis.org.uk.