Universal Credit Local Housing Allowance Monthly Rates 2024 to 2025 Revealed

What you need to know

As we enter a new fiscal year, landlords and tenants must stay informed about any changes in the housing market landscape. The Universal Credit Local Housing Allowance (LHA) rates are a crucial aspect that often impacts both parties. These rates significantly determine the amount of housing support individuals receive under the Universal Credit scheme.

For the year 2024 to 2025, the Department for Work and Pensions (DWP) has announced the monthly LHA rates, providing valuable insights for landlords and tenants in Nottingham, North  Nottinghamshire and Derby. Let’s delve into the details of these rates and what they mean for the local rental market.

Understanding Universal Credit Local Housing Allowance (LHA)

Before we explore the specific rates, let’s recap what the LHA entails. LHA is a welfare payment available to individuals in rented accommodation, including private rentals. It aims to help tenants with their housing costs, ensuring they have access to suitable and affordable accommodation.

The LHA rates are set based on the local rental market conditions, including factors such as property size, location, and market rents. These rates are updated annually, reflecting changes in the rental market and ensuring that individuals receive fair and adequate support.

Monthly Rates for Nottingham, North Nottinghamshire and Derby: 2024 to 2025

The DWP has released the monthly LHA rates for Nottingham, North Nottinghamshire and Derby from 2024 to 2025. These rates are crucial for both landlords and tenants, as they guide the maximum amount of housing support available under Universal Credit. Let’s take a closer look at the rates for different property types:

               1.            Shared Accommodation Rate (SAR): The SAR applies to single tenants under the age of 35 who rent a room in a shared house. 

               2.            One-Bedroom Rate: Individuals or couples without children are eligible for the one-bedroom rate. 

               3.            Two-Bedroom Rate: Tenants with one child are eligible for the two-bedroom rate. 

               4.            Three-Bedroom Rate: Families with two children may qualify for the three-bedroom rate. 

               5.            Four-Bedroom Rate: Larger families with three or more children may be eligible for the four-bedroom rate. 

LHA Rates 2024 to 2025

Shared Accommodation 
1 Bedroom
2 Bedrooms
3 Bedrooms
4 Bedrooms
North Nottinghamshire

Each row represents a different location, and each column represents the type of accommodation (Shared Accommodation, 1 Bedroom, 2 Bedrooms, 3 Bedrooms, and 4 Bedrooms). The values in the table indicate the monthly Local Housing Allowance rates for each category in pounds (£)

Implications for Landlords and Tenants

These newly announced LHA rates have implications for both landlords and tenants. 

For landlords, understanding the maximum housing support available to tenants can help in setting appropriate rent levels and managing rental properties effectively. It is often unhelpful for landlords to keep rents too low and not in line with the LHA rates, as this puts unnecessary stress on the landlords financially, when it comes to repair and maintenance costs, finding suitable insurance and general compliance of the property. This in turn can put tenants at risk. Sadly, far too many landlords believe that they are doing the tenants a favour in keeping rents unsustainably low, in the belief that they are rewarding good tenants. When in fact, they are potentially making their tenancy unviable. 

For tenants, knowing the LHA rates can aid in budgeting and finding affordable accommodation that aligns with their housing support entitlements. Tenants need to stay informed about these rates to make informed decisions regarding their housing options. In my opinion, agents and landlords have a duty of care to ensure that they fully understand where the rent will be coming from, and not just take a tenant's word for it that they can pay it. In my experience, all too often, when applying for a rental property, applicants will apply for properties with a rent pcm, that is way beyond their affordability. Whilst I appreciate that often this is out of desperation, I feel that landlords and agents who enter into such agreements are not helping the applicant at all. Worse case scenarios, they are facilitating an unsustainable tenancy and potential debt. 

Final Thoughts

As we navigate the evolving landscape of the rental market, staying informed about Universal Credit LHA rates is crucial for both landlords and tenants. The recently announced rates for Nottingham, North Nottinghamshire and Derby for the years 2024 to 2025 provide valuable insights into the housing support available to individuals under Universal Credit.

Whether you’re a landlord looking to set competitive rent levels or a tenant searching for affordable accommodation, understanding these rates can help you make informed decisions. If your rental property stacks up financially, when the LHA rates are employed, you can be sure that worst-case scenario, your investment is viable. By staying informed and proactive, we can ensure that everyone has access to suitable and affordable housing in Nottingham, North Nottinghamshire and Derby.

See more information on all areas in England

Diane Bialek

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