New research exposes unaffordability of private renting

Chartered Institute of Housing research reveals the impact of the 'devastating' housing benefit freeze, and calls for it to be lifted in autumn budget

New research reveals the maximum housing benefit for private renters in Northern Ireland is failing to cover shortfalls of up to £36 a week, leaving low-income families trapped in a growing housing crisis as the autumn budget approaches.

Chartered Institute of Housing (CIH) Northern Ireland has called on the UK Government to immediately lift the freeze on Local Housing Allowance (LHA), which dictates the maximum housing benefit paid to private renters.

CIH warns that the continued freeze is dismantling the financial security of thousands of low-income families in Northern Ireland, directly contributing to the housing crisis and demanding urgent intervention in next week’s autumn budget.

Availability of affordable homes ‘collapsing’

The analysis confirms the LHA freeze has caused a rapid and significant decline in affordable rental homes. LHA is designed to cover rent for the cheapest 30 per cent of properties in a local area, a goal CIH says the government has ‘failed to achieve’.

The results show:

• Availability of private rented homes at or below the frozen LHA rate has plummeted; across the most common categories (one-bed to three-bed) the benefit is now generally only enough to cover the cheapest nine to 14 per cent of available properties
• This reduction is significantly worse than in England, where availability is typically 19-20 per cent
• There is a major shortfall of one-bed homes in southern and south western areas with five per cent or fewer homes at the LHA rate; in places such as Banbridge, Newry, Armagh and Dungannon there were none available.

Justin Cartwright, national director of CIH Northern Ireland, said the data was “unequivocal” that the freeze was a “major policy failure” that is deepening the housing crisis in Northern Ireland.

'Hidden tax' on low-income families against record inflation

Mr. Cartwright warns the gap between the frozen LHA and the true cost of rent has created an unavoidable financial burden – an effective ‘hidden tax’ on low-income families, forcing painful trade-offs between covering rent and buying essentials like food and heating.

The data reveals that weekly cash shortfalls for claimants are reaching up to £36.32 in Belfast, translating to a monthly deficit of over £157 that people must find from other sources.

The largest shortfalls are hitting families requiring three-bed homes in high-demand areas, directly threatening the stability and well-being of households with children.

Meanwhile, Office for National Statistics (ONS) data confirms that Northern Ireland saw some of the highest rent inflation in the UK, peaking at 9.6 per cent in May/June 2024 – the very period that would have been used to uplift LHA rates

Mr. Cartwright continued: “This crisis is a direct result of a political choice to freeze help with housing costs, while private rents soared. The freeze has severed the vital link between the benefit and the cost of housing, leaving thousands unprotected by what was designed to be a fundamental safety net. It makes the already challenging private rental market harder to access, risking debt and homelessness.”

Call to lift freeze in autumn budget

CIH is now urging the UK Government to use the upcoming budget to restore the foundation of a home for families receiving LHA.

“The government has a clear opportunity in the budget next week to address this cycle of debt and insecurity. Anything less than an immediate uplift is an active choice to save money on the backs of low-income families and further deepen the housing crisis across Northern Ireland,” Mr. Cartwright said.