Please or to access all these features

Add post

Watch this thread

Save thread

Start a new thread

Unflip thread

Hide thread

My feed

Active Unanswered threads

Getting started FAQ's

Unanswered threads Acronyms Talk guidelines

Hide shortcut buttons

Talk

AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Unflip

1 2 3 4 5 6

Original poster

They should get rid of the housing benefit cap!

134 replies

Diggydiggydumbdum · 03/01/2025 18:13

I’ve been thinking a lot about the housing benefit cap (Local Housing Allowance cap), and the more I read, the more it feels like a scam. It was meant to save money by capping how much rent housing benefit would cover, but instead, councils are spending eye-watering amounts on temporary accommodation, and families are left stuck in the middle.

Before the cap, housing benefit covered private rents—even the inflated ones landlords charged. It wasn’t perfect, but at least people had more options: rent privately or wait for council housing. Now, with the cap, so many families can’t afford private rents and are being evicted, which means councils have to step in with temporary accommodation.

And here’s the kicker: councils spent £1.7 billion on temporary accommodation in 2023, almost double what they spent a decade ago. Individual households in temporary accommodation can cost councils £10,000–£20,000 a year, if not more. The money they’re “saving” on housing benefit? It’s being swallowed up by this anyway.

Plus, the conditions in temporary accommodation are often terrible—unsafe, overcrowded, and miles from people’s support networks. Kids are growing up in limbo, and families have no choice over where they live. Meanwhile, private agencies and middlemen are making a fortune out of the system.

Wouldn’t it make more sense to tackle the root of the problem? One option could be adjusting housing benefit to reflect real rents, so more people could afford private housing again. Another idea is rent caps, like they have in places like New York. If rent control works in one of the most expensive cities in the world, why can’t we try it here?

People always say, “Just move to a cheaper area,” but that ignores the fact that more expensive areas still need workers. Who’s going to do the jobs that keep those places running—childminders, cleaners, hairdressers, carers—if everyone has to move out?

It just feels like the current system isn’t working for anyone (except maybe the landlords and agencies profiting from temporary housing). Why aren’t we talking about this more?

OP posts:

HaddyAbrams · 03/01/2025 22:12

Dishwashersaurous · 03/01/2025 22:09

If you are working or disabled then you are exempt from the benefit cap, only a very tiny percentage of people on benefits are caught by the cap.

In most cases it doesn't apply.

So the housing crisis isn't linked to the benefit cap

I'm deemed too ill to work (at the moment) but not ill enough to be exempt from the benefit cap. It very much affects me. And I'm almost certain that my mental health issues would have improved much faster if I wasn't constantly worried about money, and living in crap accommodation. I can't afford to move. My landlord knows that and also knows that if he does the bare minimum repair wise I can't do anything about it.

Dishwashersaurous · 03/01/2025 22:09

If you are working or disabled then you are exempt from the benefit cap, only a very tiny percentage of people on benefits are caught by the cap.

In most cases it doesn't apply.

So the housing crisis isn't linked to the benefit cap

LakieLady · 03/01/2025 22:08

I agree with you about the taper rate, OP. It's a big disincentive to work more hours.

When you factor in the deductions for tax, NI and the loss of 55% of what's left from your UC, the net gain from the additional income is only just over 30%.

OneForTheRoadThen · 03/01/2025 22:07

@LakieLady now I don't claim uc as I remarried. My ex does however and has £1.1k of his £1.2k rent paid despite having the children 40% of the time. It's absolutely allowed surprisingly and seems very unfair that he can claim despite earning £36k (this is London zone 4).

WorriedRelative · 03/01/2025 22:06

Tackling the root of the problem would be building a shit load more council houses

LakieLady · 03/01/2025 22:04

OneForTheRoadThen · 03/01/2025 21:07

@LakieLady that's nonsense though. When I was a single parent on UC my whole rent was paid. I was far better off than when I married and our joint income was slightly above the UC threshold and we have to pay our whole rent. The difference between having your whole rent covered and having to pay it all is not much at all.

But don't you now have 2 incomes to pay the whole rent out of?

I do a lot of comparative UC calculations for clients, and I don't think I've ever come across a scenario where that's the case.

Gogogo12345 · 03/01/2025 22:03

ComtesseDeSpair · 03/01/2025 19:31

Plenty of countries manage public housing so that tenants aren’t required to move out when they reach a certain income level, but the rent formula is always set at a particular proportion - often a third - of household income, whatever that income happens to be. It means that tenants on low incomes can afford the rent, and that if their incomes increase slightly they pay slightly more rent but still see the benefit of having increased their incomes; it also means that tenants who hugely increase their incomes find themselves paying a rent equal to or more than that of the private market - which can act as an incentive to move and give up public housing for somebody who needs it more.

I think that’s a feasible alternative to a fixed point at which somebody is forced to move out of social housing.

That sounds a good idea actually. Not sure how it would work in practice though

bestcatlife · 03/01/2025 22:00

@Itiswhatitis80 I hear you.

Another awful aspect of this is it costs around £300 per week to rent a room at a refuge (if you are in work or have savings). So working people are essentially blocked from accessing a refuge

Original poster

Diggydiggydumbdum · 03/01/2025 21:57

It seems there’s a bit of confusion here about how housing benefit and Universal Credit (UC) work. Housing benefit isn’t designed to cover the full cost of rent for most private rentals anymore—it’s capped at the Local Housing Allowance (LHA) rate for your area, which often falls well short of actual rent prices. Many people claiming housing benefit or UC still have to make up the shortfall from their own limited income, leaving them in a tough spot.

Let’s take an example: a single parent working 30 hours a week on minimum wage (£10.42/hour) because they also have caring responsibilities at home. That’s about £1,250 a month before tax. They live in a privately rented three-bedroom home costing £2,000 a month. The LHA cap for a three-bedroom home in many areas is much lower, let’s say £1,000.

Initially, housing benefit would cover up to £1,000, leaving a £1,000 shortfall they’d need to pay out of their own income. But here’s the catch: for every £1 they earn over their work allowance (a small threshold), their housing benefit is reduced by 63p. This means that as they work more or earn more, their housing benefit entitlement goes down, leaving them with little extra money to cover rent or other costs.

This creates a situation where people feel stuck. They want to work more, but the steep taper rate (63p lost for every £1 earned) means they’re barely better off. Combine this with rising rents and the gap between the LHA and actual rent, and it’s clear the system isn’t working well for low-income working families either.

As for the comparison with those not receiving benefits, it’s not as simple as “paying £554 while others pay £2,000.” The reality is that people on benefits are still left struggling to cover their rent, and in many cases, they’re worse off than people earning higher salaries because of these cuts and caps.

OP posts:

LakieLady · 03/01/2025 21:49

kirbykirby · 03/01/2025 21:31

That means anyone getting HB/UC only has to pay £554 per month for a three bedroom house, whereas anyone not able to claim has to find £2,000 (from taxed salary), so the person on benefits gets it for £1,446 cheaper. Hardly an incentive to work more/earn more.

Show quote history

It doesn't work like that, you only get 100% of the rent covered if you're on a very low income. The amount you get is tapered according to earnings and size of household.

mitogoshigg · 03/01/2025 21:43

The problem is that money doesn't come from a magic money tree, it's money raised from taxes we pay. There needs to be a limit because landlords will increase prices.

I know it's far from perfect but those of us paying for housing have a limit

LakieLady · 03/01/2025 21:35

JimHalpertsWife · 03/01/2025 20:10

The Housing Benefit cap should fully cover the rental cost of a social home / Council home that is the right size for your family.

Why should the cap inflate, at a cost to all taxpayers (including those who live in the social housing), to further line private landlords pockets?

The only ways I can see for everyone who can't afford current private sector rents to get a home at social housing rents is to build massive amounts of social housing or cap private rents at social housing levels.

Whatshallwedohere · 03/01/2025 21:35

Silvertulips · 03/01/2025 20:18

There had to be a cap, it stops empty nesters staying in 4 bed properties when they could live in a smaller property.

Why should they stay in a life time tenancy?

The other you mention 55% have one adult working - there’s the issue - low wages that won’t cover rent - minimum wage jobs were here you have 20 plus years experience in retail and still earn the same as teens starting out.

The wage cap is a more serious problem, employers leaning on the tax payer to pay minimum wages.

This is not realistic, the cap does not stop empty nesters - there’s a housing shortage so where would they suddenly downsize too?

kirbykirby · 03/01/2025 21:31

LakieLady · 03/01/2025 20:54

If you lived where I live, that 3 bed house would be £2k a month and HB/UC would only pay £1,446.

These aren't London rents, either, it's 50-odd miles from London, so no London weighting added to your salary. (Unless you worked in London, in which case you'd be spending £500 a month on fares!)

Show quote history

Itiswhatitis80 · 03/01/2025 21:29

In a way I agree op,I’m stuck in an awful,emotionally abusive marriage,I can’t leave because I will be intentionally making myself homeless,I can’t afford to private rent,1k a month where I live in a crappy northern town,hb entitlement would be £390 a month but there are just not enough homes to go around.

EmmaMaria · 03/01/2025 21:23

Getting rid of the benefit cap doesn't save money - it is a licence to charge whayever rent a landlord wants. We used to have the solution in "old days" - rent control. A system of fixing the amount a landlord can charge based on the quality and standard of the property vis-a-vis the local market factors.

EllieRosesMammy · 03/01/2025 21:21

The housing benefit cap for our area is £500, I don't know anywhere you can rent for that price in our area at the moment (even in a HA house) 🤦🏻‍♀️

PokerFriedDips · 03/01/2025 21:17

There should be rent caps not housing benefit caps - and the rent caps should apply to all, not just hb claimants. A standard rental rate per square metre that is the expected rental cost in an area, and there could be licences for say 25% of properties to charge a higher rent than this if they can show that the property is of significantly nicer quality than the average rental property in the area. If a property can't be economically rented out at the rent cap rate and still meet the landlord's costs then they will just have to sell up - beneficial to first time buyers too!

OneForTheRoadThen · 03/01/2025 21:13

And for my wages as I also worked while getting a Uc Top up

OneForTheRoadThen · 03/01/2025 21:11

@Mydogisamassivetwat from the rest of your allowance as a single person and from the child allowance you get. I speak as someone who was on UC as a single person and had my full rent paid.

Mydogisamassivetwat · 03/01/2025 21:09

OneForTheRoadThen · 03/01/2025 20:37

But that would mean you're only spending, at most, £300 on rent. That's really good in London compared to people who don't qualify for UC and have to pay the full rent amount.

Show quote history

But if you were on full HB, where would you get the £300 from? That’s the problem.

And that was 6 years ago. The house I rented for 1,500 now goes for 2,100 pm. I bet the LHA hasn’t raised by the same amount.

OneForTheRoadThen · 03/01/2025 21:07

MyNavyPombear · 03/01/2025 21:05

You are not wrong.

LakieLady · 03/01/2025 21:03

OneForTheRoadThen · 03/01/2025 20:37

But that would mean you're only spending, at most, £300 on rent. That's really good in London compared to people who don't qualify for UC and have to pay the full rent amount.

Show quote history

People only "don't qualify" for UC if their income is deemed sufficient for their needs, including housing costs.

If the LHA rate was comparable to actual rents, someone who doesn't currently qualify might be eligible, because the higher cap on the housing costs element raises the income threshold at which entitlement ceases.

OneForTheRoadThen · 03/01/2025 20:58

But @LakieLady that would mean your rent would be £600ish. That's more than reasonable in comparison to people who don't get any help and have to pay the full amount.

Unflip

1 2 3 4 5 6

Swipe left for the next trending thread