Help with housing costs

Sources of financial help to pay rent and deposits include nationally and locally administered benefits, assistance schemes and loans.

This content applies to England

Rent deposit and guarantee schemes to help with deposits

There are rent deposit/guarantee schemes in some areas that can help with deposits. These schemes operate according to different models.

Some schemes pay a deposit in cash to the landlord. Others provide a bond to the landlord, which means that the scheme recompenses the landlord, up to an agreed limit, if the landlord suffers loss due to property damage or non-payment of rent.

When a local authority is involved, the scheme may ensure that housing benefit claims are fast tracked.

Some schemes have a list of approved landlords who can offer accommodation. Schemes have different eligibility criteria, for example some have age restrictions and others may only accept people who claim benefits or have a low income.

Local authorities should be able to provide information about deposit schemes in their area.

Housing benefit help with rent

Housing benefit is a means-tested state benefit that enables people who are liable for rent payments to receive money to pay for them. Anyone who pays rent is eligible to apply, regardless of the type of tenancy they have.

Housing benefit is administered by local authorities. Each local authority has a duty to make payment on a claim once all the relevant information has been received, within fourteen days or as soon as possible after that.[1] They also have a duty to make a first payment of housing benefit if they have failed to assess a claim within 14 days.[2]

Discretionary housing payments

A local authority can award a discretionary housing payment for a rent deposit (or rent in advance) for a property that the claimant has not yet moved into but only if they are already entitled to housing benefit for their present home.[3]

Locally administered assistance schemes

Each local authority devises its own scheme for helping meet hardship that cannot be met from regular income. Applications for assistance are made to the local authority. Government funding is provided to local authorities for these schemes.

There is no statutory requirement on a local authority to provide a scheme for locally administered assistance. If they do have such a scheme it is for the local authority to determine who to help and how and when to help them.

Budgeting loans and budgeting advances

A budgeting loan is an interest-free loan to help benefit claimants spread the cost of items that they cannot afford on their current income.

A claimant must have been claiming income support, income-based jobseeker's allowance, pension credit or income-related employment and support allowance for at least 26 weeks to qualify. Breaks of 28 days or less in the 26-week period are ignored.

A claimant who has been in receipt of universal credit for 26 weeks also qualifies for a budgeting loan as long as, at the date of determining eligibility, they are receiving state pension credit.[4]

Other universal credit claimants may claim a budgeting advance, ie an advance payment of universal credit.

Loans and advances are repaid by deductions from the claimant's benefit.

Budgeting loans can be awarded for expenses under a number of defined categories, which include rent in advance and/or removal expenses for fresh accommodation, and furniture and household equipment.[5]

The Department for Work and Pensions' (DWP) Budgeting Loan Guide contains directions and guidance concerning eligibility for budgeting loans.[6]

Paying a deposit over time

Some landlords may accept payment of a deposit over time. For example, if a tenant signs a 12-month fixed-term agreement, the landlord may allow a tenant to pay the deposit in instalments over the first six months of the tenancy. However, the requirement for deposits to be protected from 6 April 2007 may make this arrangement more complicated and less attractive to landlords.

Social services

People with children may be able to get financial assistance under the Children Act 1989 from social services to help them to pay a deposit.[7]

Help with rent in advance

Community care grants and crisis loans are no longer available to new applicants after that date and have been replaced by a system of locally administered assistance, budgeting loans and budgeting advances.

Much of the discretionary social fund was abolished on 1 April 2013.[8]

Debt advice and help during the pandemic

Debt charity Step Change has published guidance on debt and coronavirus that outlines what assistance may be available for people unable to meet their financial obligations, including paying their rent or mortgage, because of the coronavirus pandemic.

For more information, see Covid-19 and Housing.

Last updated: 2 March 2021

Footnotes

  • [1]

    reg 91(3) Housing Benefit Regulations 2006 SI 2006/213.

  • [2]

    reg 93 Housing Benefit Regulations 2006 SI 2006/213.

  • [3]

    paras 320-330, Discretionary Housing Payments: Good practice Guide, DWP, March 2011.

  • [4]

    Direction 8 Budgeting Loan Directions (set out in the Budgeting Loans Guide, DWP, May 2013) as amended by Social Fund (Budgeting Loan) Amendment Direction 2017.

  • [5]

    Direction 2 Budgeting Loan Directions (set out in the Budgeting Loans Guide, DWP, May 2013).

  • [6]

    Budgeting Loan Guide, DWP, May 2013.

  • [7]

    Under s.17 Children Act 1989.

  • [8]

    s.70 Welfare Reform Act 2012; Welfare Reform Act 2012 (Commencement No.6 and Savings Provisions) Order 2012 SI 2012/3090.