Landlords, agents and charities have warned that inadequate Local Housing Allowance (LHA) rates are pushing renters to the cliff edge.
Forty groups including the NRLA, Propertymark, Shelter and Crisis have signed a joint letter urging the Prime Minister to restore LHA rates to at least the 30th percentile from next year.
The LHA sets the limit on how much rent support people who receive benefits can access - with a freeze, implemented in April, meaning rates are no longer pegged to real-world rents.
They argue that increasing levels to the 30th percentile would guarantee renters can afford a third of the available properties in their area, at the cheapest end of the market.
As of November 2024, 48% of the 1.6 million private rented households receiving Universal Credit faced a shortfall between the financial support they receive and their rent. Crisis suggests fewer than three in every 100 private rented properties in England are now affordable for people on housing benefit, down from 12% in 2021-22 - the first year of the previous freeze.
The Local Government Association says frozen LHA rates have burdened councils in England with more than £700 million in unrecoverable costs over the past five years, after spending £2.8 billion on temporary accommodation last year - an increase of 25% in just 12 months. In the letter, the groups argue that action would lift 75,000 children and 125,000 adults out of poverty across the UK.
In the run-up to the Budget on 26 November, they want the government to restore LHA rates to at least the 30th percentile from 2026/27, with a commitment to maintain this level for the duration of this Parliament and to increase the benefit cap accordingly.
NRLA chief executive Ben Beadle says this would make an immediate and meaningful difference. "It would help families avoid arrears, reduce the risk of homelessness, and give landlords greater confidence to let to those in receipt of benefits," he adds.