Would universal credit increase to cover a rent increase?

[SunnyUpNorth]

Just wondered if anyone knows if someone received universal credit and their rent is increased would the UC increase accordingly to cover part/all of the rent increase?

We have a lovely tenant in a house we rent out. She’s been there for about 5 years and we have never increased the rent, in fact I think we dropped it for her when she moved in as she’s a single parent. She works in a min wage job and receives UC. Her rent is Al over 25% below current market value for the area. I don’t want to affect her finances by increasing the rent, but wondered if we did increase it a little would she be able to get more money towards it from UC?

Our mortgage is due for renewal in about 3 months and will go up by a couple of hundred pounds a month. I’m only thinking of increasing her rent by around £25-50 per month.

The housing allowance part of Universal Credit is set at the lowest 1/3 of rents in an area and it hasn't kept pace with rents increasing.
If she is already on UC then unless your rent is below the local.housing allowance then she won't get any more UC. She will have an entitlement worked out and then deductions if her take-home pay is over a certain amount. (About £618 pm)
You can check the maximum LHA amount here by entering the postcode lha-direct.voa.gov.uk/search.aspx

I very much doubt it. Not only do I keep reading that ministers are refusing inflationary increases in benefits/freezing them, but when I had to claim housing benefit, they priced the amount I was allowed to claim to be in the bottom 10 percentile of the entire rental market.

Yours might be in the bottom 25%, but I bet what she gets doesn't cover all her rent.

Coupled with the cost of living increases, I doubt your tenant has a pot to piss in.

My rent increased and it's now above the threshold of what UC will cover.

To find out what the LHA rent is in your area you can search on your postcode

https://lha-direct.voa.gov.uk/Secure/Search.aspx

This is the maximum that is covered by universal credit which is woefully low as they usually cover a large area. If you increase alongside the increases for this she would have her rent covered by UC.

Housing allowence https://www.nrla.org.uk//resources/managing-your-tenancy/local-housing-allowance-rates-2021 this is for 2022-23

but gives you the amounts for the different areas, Norfolk is very different prices from central London

An extra £50 a month is a lot for a single parent on UC to try and find - on top of everything else increasing... Could you not just accept the mortgage increase and make a little less profit OP ?

Could you not just accept the mortgage increase and make a little less profit OP?

It’s rarely as simple as making less profit. It comes down to what the lender is comfortable with. By the sounds of it op may not meet the lenders stress testing criteria. Op would have to either find a several thousand in order to reduce their level of borrowing or increase the rent.

If OP hasn’t raised the rent in 5 years then £50 a month really isn’t a lot to raise it by.
it would have been better to do it gradually over a few years though instead of in one go.

Why not do away with the rent altogether OP, because your tenant deserves it and you don’t?

As a previous poster has said, each local authority has a set amount that they'll give, basically.

For instance, in my area with an adult and one child, the rate is £117.37 a week. That's the entitlement for two bedrooms. If they had three bedrooms, they'd still only have the allowance for two bedrooms.

My sibling has two pre-school aged children, opposite sex. They're entitled to the one bedroom rate until the eldest child is over 10 (maybe 12?) then they'd be entitled to three bedroom rate and get £136.93 a week.

Hopefully my ramblings make sense.

I doubt it, you can check this by googling the LHA of your local area, if the rent is above the maximum it's very unlikely that she is getting any more than that. She's likely topping up the difference already.

I think you miss my point. The tax payer covers most, or possibly all of the rent, not the Tennant. Perhaps we should all pay a bit more income tax so that landlords mortgage requirements are covered and they can still trouser a healthy profit ?

It’s a shit system but is the answer for the OP to absorb more costs, despite having reduced the rent for the tenant initially and then kept it 25% below market value? She’s only looking for the tenant to cover £25-£50 of an increase of several hundred pounds.

Like you, I am also growing tired, as a taxpayer, of paying other people’s housing costs. However, there are several solutions that don’t involve charity from the OP:

• Increase the minimum wage and taper off UC inputs proportionately
• Sort the mortgage interest rates out (benefits lots of us, not just landlords)
• Invest in social housing and stop bloody selling what’s left for a song
• Ensure UC claimants work the maximum hours they are able to, at the soonest possible time their children can enter nursery
• Provide free training for low paid workers into stable careers (personally I would remove tuition fees for NHS jobs paying below £40k and help the recruitment crisis at the same time).

The answer is no it wouldn't be covered. Housing benefit rates are fixed at 2019 levels.

Sadly many people are struggling to afford these rent increases and single parents can't easily take on extra hours or work due to their caring commitments.

It depends what the local housing allowance is for the area she's in. If the increase is within the LHA then UC will cover it.

Not all landlords are making profits.. my friends mortgage is £220 a month more than what he rents the property out for. He's been making this loss for over a year and can't keep it up for the sake of his tenant (this was his old house), he's either going to have to put the rent up to match the mortgage (which is going up again) or sell the house. Being a landlord just isn't worth it anymore in my eyes.

Mine went from 1250pm to 1500

UC only cover 1000 which is the max LHA in my area. It's really tough

Perfect example of someone who could never afford to have been a landlord in the first place. Borrow to let has been socially wrong on so many levels... Hopefully the overleveraged examples, like your friend, will become a thing of the past. I wouldn't bet on it though.

They're gaining a house they can sell that's been paid for, or mostly paid for by other people. I'd say that was a profit.

@DrySherry sounds like a good LL. I say that as a single parent renting in council. I would speak to your tenant OP.. could she increase her hours? Do an extra shift to cover £50 extra per month maybe?

Your tenant is likely getting the maximum rent help by UC already but worth checking. It depends how much she earns

My area pays £450 per calendar month but the person I care for has for a rent increase of £175 to £600. It won't cover the increase. He will have to use his PIP to cover it.

Thanks all for your helpful comments, I didn’t know about the maximum amount for an area. So yes she will currently be topping it up but it’s won’t be by much.

it was actually following a chat today with the local letting agent who originally found our tenant for us. I bumped into her and we were chatting and I asked her about the UC portion of the rent and how we had never increased the rent etc. She was saying that we might be putting her at a slight disadvantage as if anything ever happened to our circumstances and we had to sell Jo for example our tenant would have been massively priced out of the local market and wouldn’t be used to the higher rates! Slightly skewed logic!

Wont rush into anything, might consider a small increase at some point. She is lovely and I do feel slightly responsible for her. We always give her a month off at Christmas and we kept trying to make her not pay during covid etc. We do have her best interests at heart and we are also grateful for the fact that she is a great tenant and looks after the house really well.

Just look up the local housing allowance for your area. The link is upthread. Twice, I think.

Have to say I kind of admire your brassneck in openly stating as a landlord that you'd like to get as much money off the state as you can.

If you charged for December, then wouldn’t that workout similar to a small increase over the year?

I bloody hope so too.