Universal Credit Rent Increase 2025

In 2025, millions of Universal Credit claimants across the UK will see a boost in their housing support thanks to updates in how rent support is calculated. After years of stagnation in Local Housing Allowance (LHA) rates, the government has finally announced a significant rent support increase, aimed at reducing homelessness and easing pressure on renters. If you’re a Universal Credit claimant, here’s what the increase could mean for you.

The LHA determines the maximum housing support Universal Credit claimants can receive. However, between 2020 and 2023, the LHA was effectively frozen. This left claimants struggling to cover rising rents, particularly in cities where housing costs have soared.

Responding to growing criticism from housing charities, MPs, and local authorities, the government has now committed to re-aligning LHA rates with current rental prices. This means more people will receive a higher portion of their rent covered.

What Is Changing?

Starting April 2025, LHA rates will be updated to reflect at least the 30th percentile of current market rents in each area. This adjustment could result in monthly increases of £40 to £120 in rent support, depending on location and property size.

For example:

In London, a single-bedroom flat support could increase from £900 to around £1,050 per month.
In Manchester, a two-bedroom flat may see a rise from £650 to £750.
In rural areas, increases may be smaller but still impactful—around £30–£50 per month.

Who Will Benefit?

This increase will apply to:

All Universal Credit claimants receiving the housing element
Those on legacy benefits like Housing Benefit
Private renters (council housing tenants receive different rates)

If you’re renting from a private landlord and receiving housing support via Universal Credit, your payments will be recalculated automatically to reflect the new LHA rates.

Will You Need to Reapply?

No reapplication is needed. The Department for Work and Pensions (DWP) will update payment amounts automatically. However, it’s advisable to check your online Universal Credit journal after April to verify your new payment amount and ensure your rental details are accurate.

Impact on Households

This rent increase is expected to reduce shortfalls that force tenants to top up rent from their limited income. It’s also aimed at decreasing the number of households in rent arrears and temporary accommodation.

However, some critics argue that unless LHA is adjusted annually, these gains could be short-lived. There are also concerns about whether landlords will raise rents further, knowing tenants can now afford more.

Additional Housing Support in 2025

Apart from LHA changes, the government is:

Expanding Discretionary Housing Payments (DHPs) for those still struggling
Increasing investment in affordable housing
Offering housing advice and legal aid services for renters facing eviction

How to Check Your New Entitlement

To find out how much more you could receive:

Visit the LHA Direct website
Enter your postcode and household details
Compare your current entitlement with the updated rates from April 2025

If your rent is still not fully covered, contact your local council about DHPs.

Conclusion

The Universal Credit rent increase in 2025 is a welcome relief for private renters struggling to keep up with surging housing costs. While it’s not a silver bullet for the housing crisis, it’s a significant improvement over years of stagnant support. Stay informed, monitor your benefit journal, and take advantage of other local resources to ensure housing stability this year.