Merton among handful of areas where housing benefit covers required rent

Merton is one of only 17 English areas where housing benefit covers the cheapest 25% of shared rooms on the private rental market, new analysis suggests.

Local Housing Allowance is a housing benefit payment made to those eligible for Universal Credit and is meant to cover the cheapest 30% of rooms in a shared house on the private rental market.

Figures from youth homelessness charity Centrepoint show just one in 13 local authorities across the country provide sufficient housing benefit for people living in the area.

The charity said without the Government raising housing benefit rates, people face homelessness amid soaring rental prices.

The figures show people renting from private landlords who are eligible for housing benefits in Merton will receive £482 per month from the local housing allowance this year.

The median rent for a room in a shared house in Merton is £475, while the cheapest 25% of rents cost up to £475 – which housing allowance covers entirely.

Across the country, just one in 13 local authorities provide sufficient housing benefit to afford the cheapest quarter of rental properties, while the average shortfall is more than £90 per month, though many areas top £100.

Centrepoint said people on low incomes renting homes are competing with one another, paying soaring costs and offering lump sums to secure properties.

Alicia Walker, head of policy, research and campaigns at Centrepoint, said: "This is particularly worrying for those vulnerable young people who rely on Universal Credit to keep a roof over their heads.

"The fact is that if you’re on a low or fixed income then no amount of clever budgeting is going to help you find an additional £100 or more to cover the rent.

"The Government has asked low-income renters to defy the gravity of this crisis and somehow find the money to cover the spiralling costs.

"That simply isn’t possible for most young households and, without the Government increasing rates immediately, many of them could face losing their home."

The latest Office for National Statistics figures show prices for all rental properties in London have increased by 4.3% in the year to January, while average rents across England have also risen by 4.3%.

A Department for Work and Pensions spokesperson said: "During the pandemic, we increased Local Housing Allowance significantly and beyond inflation, benefiting over 1 million households by an average of over £600 over the year.

"We’re maintaining that boost, keeping support for private renters above pre-pandemic levels.

"The benefit cap provides a strong work incentive and ensures fairness for hard-working taxpaying households by encouraging people to move into work where possible. It balances fairness for taxpayers with providing a vital safety net."