Propertymark calls for benefits increase to aid private tenants

Propertymark calls for benefits increase to aid private tenants

Propertymark has urged the government to raise housing support to better match private rental costs, highlighting the widening gap between Local Housing Allowance and actual rents faced by low-income tenants.

Propertymark has formally written to the Department for Work and Pensions (DWP), pressing for clearer data on the Crisis and Resilience Fund and for reforms to Local Housing Allowance (LHA) to better reflect current market rents. The trade body emphasises the insufficiency of one-off crisis payments as a long-term solution for tenants struggling to meet rent payments.

The call comes amid ongoing concerns about affordability in the private rented sector (PRS), with research showing a sharp decline in the number of rental properties affordable to housing benefit recipients. Propertymark warns that the gap between LHA rates and actual rents risks increasing rent arrears, tenancy failures and homelessness, with wider implications for local authority budgets and social housing demand.

Data transparency and reform demands from Propertymark

In its letter to Baroness Sherlock, Minister of State at the DWP, Propertymark has requested that the government publish detailed data on the Crisis and Resilience Fund’s housing payments. This includes information on the number of applications, approvals, refusals, repeat requests, and the amounts paid towards rent. The trade body argues that such transparency is necessary to assess whether emergency support is effectively reaching those in need and to understand how often households rely on the fund to bridge the gap between their rent and LHA.

Propertymark acknowledges that LHA is designed to assist with rents at the lower end of the market and is not intended to cover all rental costs. However, it highlights that repeated freezes to LHA rates have caused them to fall increasingly out of step with rising rents. According to research cited by Propertymark, only 2.7% of private rental listings were affordable to housing benefit recipients in early 2025, a significant drop from 12% in 2021-22.

The trade body stresses that without adequate housing support, tenants on low incomes face difficult choices, potentially leading to rent arrears and tenancy breakdowns. This situation places additional strain on local councils and social services, especially given the shortage of affordable and social housing options.

Context of affordability challenges in the private rented sector

The private rented sector has become a critical housing source for many low-income households, particularly where social housing supply is limited. However, the mismatch between housing benefit support and market rents has been a persistent issue. The Local Housing Allowance, which sets caps on housing benefit and Universal Credit housing support, has not kept pace with rent inflation in many areas.

Freezes to LHA rates, implemented over several years, were intended to control public spending but have inadvertently widened the affordability gap. This has led to a situation where many tenants reliant on housing benefits struggle to find properties within their entitlement limits, pushing them towards less secure or lower-quality housing or into arrears.

The introduction of the Crisis and Resilience Fund was intended as a temporary measure to provide emergency assistance to those facing short-term financial hardship. However, Propertymark’s call highlights the limitations of this approach as a substitute for adequate ongoing housing support.

Practical implications for landlords and letting agents

For landlords and letting agents, the growing gap between LHA and market rents can complicate tenancy management. Tenants reliant on housing benefits may face increased risk of rent arrears, which can lead to more frequent disputes and potential possession actions. Agents need to be vigilant in monitoring rent payments and tenant circumstances, while maintaining clear communication to manage expectations and avoid tenancy breakdowns.

Landlords should also be aware of the potential impact on demand for lower-rent properties, which may become more acute if housing support remains insufficient. This could affect portfolio strategies, especially for those with properties in areas where LHA rates are significantly below market rents.

Letting agents may find themselves increasingly involved in advising tenants on benefit entitlements and support options, as well as liaising with local authorities regarding emergency housing payments. Understanding the scope and limitations of the Crisis and Resilience Fund will be important for managing cases where tenants face short-term financial crises.

Uncertainties and what landlords should watch for

It remains unclear how the government will respond to Propertymark’s call for increased transparency and reform. The publication of detailed data on the Crisis and Resilience Fund could inform future policy decisions but has not yet been confirmed. Additionally, any adjustments to LHA rates would require political agreement and budget allocation, which may be subject to wider economic and fiscal considerations.

Landlords and agents should monitor developments closely, including any announcements from the DWP or Department for Levelling Up, Housing and Communities regarding housing support policies. Changes to benefit levels or eligibility could have direct effects on tenancy sustainability and rental income stability.

Given the ongoing affordability pressures, landlords may also want to review their rent-setting strategies and consider the potential risks of letting to tenants reliant on housing benefits. Maintaining thorough records of rent payments, communications, and any support offered will be important for compliance and dispute resolution.

What landlords should consider now

• Review tenant rent payment histories and identify any signs of financial difficulty early.
• Stay informed about local LHA rates and how they compare to current market rents in your area.
• Familiarise yourself with the Crisis and Resilience Fund and local authority emergency housing support schemes.
• Maintain clear communication channels with tenants, especially those on housing benefits, to manage expectations and address issues promptly.
• Keep detailed records of rent arrears, communications, and any assistance provided to support tenancy management and potential possession proceedings.
• Monitor government announcements on housing benefit reforms and prepare for any changes that could affect your portfolio.

Supporting landlords through changing housing support policies

The Landlord Association (TLA) offers members access to up-to-date compliance resources and practical guidance to help manage the challenges posed by evolving housing support policies. Through TLA’s BETA testing of ORBIT, a new property management and compliance platform, landlords and letting agents can organise property records, monitor rent payments, and keep track of communications and repairs in one place. ORBIT aims to assist members in maintaining evidence of compliance and managing tenancy risks associated with benefit-dependent tenants.

Membership also provides access to expert insights on regulatory developments and government policy changes, helping landlords prepare for shifts in housing support that may impact rent affordability and tenancy stability. Exploring TLA membership and ORBIT BETA access can support landlords in staying informed and organised amid ongoing rental sector reforms.

Landlords should consider how these tools and resources can complement their current management practices, particularly in areas with high numbers of benefit-dependent tenants or where affordability pressures are most acute.

Looking ahead, the interaction between housing benefit levels, emergency support funds, and market rents will remain a critical area for landlords and agents. Staying informed and proactive will be essential in managing risks and supporting sustainable tenancies.

Sources: Letting Agent Today