Less than 2% of rents affordable for benefit claimants, report warns

Millions of tenants are struggling with rising housing costs as the government allows rental prices to rise without supporting those seeking help, new research has warned.

Only two in 100 properties in Britain are now considered suitable for tenants for housing benefits, according to a report by Crisis and Citizens Advice.

Housing benefits were frozen for four years from 2020 and then increased on a one-off basis by the Conservatives in April 2024. Since then private rents have increased by 10.2 per cent, from an average of £1,254 to £1,383.

The report warned that the policy decision was “widening the gap” between the income people earn and the real cost of rent, pushing families to “breaking point”.

In practice, the freeze applies to local housing allowance, a formula used to decide how much housing benefit a household can claim based on its area. When raised, it is intended to reflect at least the cheapest third of rents in any given area.

But the average gap between housing benefit and the cheapest third of two-bedroom rental properties is now £403 a month, Crisis and Zoopla found.

Matt Downie, chief executive of Crisis, said: “People on low incomes across the UK are facing an impossible situation. With housing benefit frozen, more and more people are struggling to cover rent costs and basic needs such as food and bills, forcing them into a cycle of debt, poverty and homelessness.

“Furthermore, the freeze is putting unsustainable pressure on an already overworked system. With local authorities already under huge pressure and the costs of temporary accommodation at an all-time high, without urgent change we will only see more people trapped in this vicious cycle.”

A national survey carried out by Citizens Advice for the report reveals that almost half (48 per cent) of private renters in the UK receiving Universal Credit have had to cut back on essentials such as food, transport and energy costs in the last six months.

As of February 2026, there were 6 million people receiving a benefit designed to help with housing costs. This is divided into 1.6 million for housing benefit and 4.4 million for its replacement, the housing element of Universal Credit.

Approximately 1.7 million people claiming the latter were in the private rental sector; Those who benefit from housing assistance are mostly people in temporary accommodation and at state pension age.

Citizens Advice adds that its frontline advisers are helping more than 6,600 private tenants in England and Wales with housing benefit issues accessing food banks in 2025/26, a 79 per cent increase on 2021/22.

Dame Clare Moriarty, chief executive of Citizens Advice, said: “Many families are already at breaking point, cutting spending to the bone and still unable to pay the rent or put food on the table.

“Tackling rising housing costs is vital if the Government is serious about reversing the cost of living crisis. Private renters are struggling to keep their heads above water; no freezing of housing benefit will provide them with a vital lifeline.”

last spring, Independent reported the difficult situations faced by tenants due to lack of housing assistance. The continuation of the freeze means that they will not be able to earn a higher income than at that point.

The research comes as many housing campaigners are setting their sights on affordability following a victory for the sector in the form of the Tenants’ Bill of Rights.

The long-awaited bill, which will come into force from May, puts an end to controversial ‘no-fault’ eviction notices in Section 21, abolishes fixed-term contracts and gives tenants greater power to oppose rent increases.

Although welcomed by tenant groups, there have been calls for further action from the government, with average costs outpacing wage growth in 11 of the last 15 years.

Last month, the Tenants’ Reform Coalition, made up of 18 major housing charities and tenants’ unions, called on the next prime minister, possibly Andy Burnham, to introduce rent controls.

The defense came from various studies on the necessity and feasibility of rent control measures by independent think tanks such as the Joseph Rowntree Foundation, the Institute for Public Policy Research, and the New Economics Foundation.

A government spokesman said: “We are tackling rising rents and housing shortages with our commitment to build 1.5 million homes – the biggest boost to social and affordable housing in a generation – and our efforts to reverse poverty are making a real difference, as household incomes rise by 5 per cent in real terms and foodbank use falls.

“But we know there is more to do, which is why we launched the £1bn Crisis and Resilience Fund, are increasing the National Living Wage by up to £900 a year for a full-time worker, investing more than £1bn in homelessness services and investing a record £39bn in affordable and social housing.”