Join the Residential Landlords Association
Coronavirus Special Notice

Housing costs and rent under Universal Credit


This guide looks at specific housing related aspects of Universal Credit. Under Universal Credit housing costs are paid as one of the elements of the claim to assist tenants with their rental payments. This is paid as one of the elements of tenants’ benefits.

Housing Costs - conditions

Instead of a separate payment for rent, under UC the Claimant/Tenant is paid housing costs, which is one of the elements which make up the total UC monthly payment. To be eligible a Claimant must be responsible for paying rent, there must be a legal liability to pay rent and the Claimant must occupy the property. Housing costs are based on the lower of the relevant local housing allowance and the actual rental payment. Payment can normally only be made in respect of one property at a time.

Payment for two properties

Payment for two properties is possible where;

If someone cannot move into accommodation immediately because he/she is in hospital or care housing costs can be paid for the new accommodation for up to one month.

Where the Claimant is unable to live in a property due to its condition, e.g. it is affected by flooding or major repairs are needed, then housing costs can either be paid in respect of that property or alternative accommodation (but not both).

Proof of Tenancy

DWP will require proof of the existence of the tenancy before housing costs can be paid. They will ask to see the tenancy agreement. If this is not produced, if one does not exist, then the DWP will contact the landlord for confirmation of the existence of the tenancy.

Paying housing costs under Universal Credit

Universal Credit is completely different to the current Housing Benefit scheme. From the landlord's perspective, very much more labour intensive, technically more complicated, significantly more risky, financially punitive and poses a much greater threat to tenancy sustainment, than housing benefit ever has.

DWP Guidance for landlords

DWP have published a Guide for Landlords. To read the latest version click here. This gives details about what you need to do for example if you want to claim direct payments.

How are housing costs calculated for private landlords?

Private landlords are paid the lower of the actual rent payable or the applicable local housing allowance amount. The same calculation is made as is currently made for LHA. As part of the roll out for Universal Credit the Government are not currently proposing any changes to the existing LHA regime for this purpose. Housing costs will be limited to a maximum of four bedrooms as is now applied to LHA. Normally, rents will be determined annually according to broad market rental areas but as with LHA, rates are currently frozen.

Landlord & Investment Show London Olympia 2019
99 Homes
John Pye Auctions