Local Housing Allowance shortfall: what to do when your benefit does not cover your rent

If you rent privately and receive housing support through Universal Credit or Housing Benefit, the amount you receive may not cover your full rent. The gap between what you receive and what you owe is called a shortfall. Here is why shortfalls happen and what you can do about them.

What is Local Housing Allowance?

Local Housing Allowance (LHA) is the system used to calculate how much housing support a private tenant in England can receive. It is based on:

• The area you live in (called a Broad Rental Market Area or BRMA)
• The size of household you are assessed as needing (based on who lives in your home)

The LHA rate is set at the 30th percentile of rents in your area, meaning it is designed to cover the cheapest 30% of available properties. This is a rule set by the government, not a figure that reflects what properties actually cost to rent.

Why does a shortfall happen?

A shortfall happens when your actual rent is higher than the LHA rate for your area and household size. This can occur because:

• Rents in your area have risen faster than the LHA rate
• The LHA rate for your bedroom category is lower than most rents in your area
• You are under 35 and single, and are therefore entitled only to the shared accommodation rate, even if you live alone
• You have a larger property than the LHA calculation covers, for example, you have a spare room that is not counted under the rules

What can I do about a shortfall?

Apply for a Discretionary Housing Payment

A Discretionary Housing Payment (DHP) is extra money your local council can pay to help cover a rent shortfall. It is not automatic, you must apply for it and explain why you need the extra help.

DHPs are paid from a limited budget. Councils prioritise applications from people who are at risk of losing their home, who have a disability, or who would face significant hardship without the payment. A DHP is usually time-limited, not a permanent solution.

Ask for a benefit review

If you think your LHA rate is wrong, for example, if you have been placed in the wrong bedroom category, ask your council or the Department for Work and Pensions (DWP) to review it. You may also be able to challenge a decision if your circumstances have changed.

Negotiate with your landlord

Some landlords will consider reducing the rent if the gap between the LHA rate and the current rent is small, particularly if you are a reliable tenant they want to keep. This is worth asking, though there is no obligation on a landlord to agree.

Check whether you are being housed in the right size property

If you are a council tenant or housing association tenant who is underoccupying your home, you may be affected by the under-occupation charge (sometimes called the bedroom tax). Transferring to a smaller property can remove the shortfall. Ask your landlord or housing association about mutual exchange or a transfer.

Does the shortfall affect my housing disrepair claim?

If your home is in disrepair, the shortfall does not directly affect your claim. However, if the disrepair has caused extra expenses, such as higher energy bills because of poor insulation, or damage to your belongings, these can be included as special damages in a claim.

If you are struggling to pay your rent because of a shortfall and your landlord is threatening eviction, contact us as well as your council's housing team as soon as possible.

Where can I find my LHA rate?

LHA rates are published on the Valuation Office Agency website. Search for your Broad Rental Market Area to find the rates that apply to your area and bedroom category.

When should I contact Support for Tenants?

If you are in a private rented home that is in disrepair, call us. We can advise whether a housing disrepair claim is right for you, separately from any issues with your rent payments.

Call us on 0800 030 4669. No upfront cost. You only pay if you win, and the fee comes out of the compensation, not your pocket. If you don't win, you pay nothing.

Sources

• Housing Benefit Regulations 2006 (legislation.gov.uk)
• Housing Benefit (GOV.UK)