Universal Credit Housing Costs Element

For private renters, the housing costs element is capped at the Local Housing Allowance (LHA) rate for your area and bedroom category. The LHA is set at the 30th percentile of market rents in each Broad Rental Market Area — meaning it covers the cheapest 30% of rents. If your rent is above the LHA rate, you are responsible for paying the difference yourself.

The bedroom category is determined by the number of people in your household. Single people under 35 are generally entitled only to the shared accommodation rate (covering a room in a shared house rather than a one-bedroom flat), unless they fall into one of the exempt categories (such as severe disability, ex-care leaver, or former prisoner).

LHA rates are reviewed annually by the Valuation Office Agency (VOA) and have been uprated to reflect market rents from April 2024 — but in high-demand areas the gap between LHA rates and market rents remains significant.

Social housing tenants on UC face the under-occupancy charge (commonly called the bedroom tax) if their home has more bedrooms than the DWP considers they need. The charge reduces the housing element by:

• 14% for one extra bedroom
• 25% for two or more extra bedrooms

The bedroom tax does not apply if you or your partner are of pension age, or if the extra bedroom is needed for an overnight carer or a child who cannot share because of a disability. Apply to your council for an exemption if you believe you qualify.

If the bedroom tax affects your housing element, you can apply to your council for a Discretionary Housing Payment to cover the shortfall.

If your UC housing element does not cover your rent, your options include:

• Discretionary Housing Payment (DHP): Apply to your local council for a top-up to cover the shortfall. DHPs are not guaranteed and are awarded at the council's discretion based on your circumstances and the council's budget.
• Negotiate with your landlord: If you are in private rented accommodation, you may be able to negotiate a lower rent, particularly if you are an existing tenant with a good payment record.
• Consider moving: If you are looking for new accommodation, search specifically for properties within your LHA rate. Your local council or housing charity may be able to help you find a suitable property.
• Check for errors in your award: Make sure your UC housing element is being calculated correctly — if you have dependent children, a disability, or other qualifying circumstances, your entitlement may be higher than you think.