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Universal Credit Housing Costs

Adele MacGregor

Written by

2nd Nov 2022 (Last updated on 28th Nov 2022) 5 minute read

For those responsible for paying rent for the home they live in or who have a mortgage, Universal Credit may be able to provide help towards the cost. This is called Universal Credit housing costs.

If you are unemployed, on a low income, or cannot work for health reasons, you may be entitled to Universal Credit (UC). This is designed to help with living costs. If you already claim UC and need help with your housing, you may also be eligible for help with housing costs.

According to the government website, this is called your housing payment and is in addition to UC. It can either help you with rent, mortgage interest payments or service charges associated with your home.

This article will cover the following:
  1. What are Universal Credit Housing Costs?
  2. Am I Eligible For It?
  3. What Do I Need to Claim?
  4. How Much Financial Help Can I Get?
  5. How are Housing Costs Paid?

What are Universal Credit Housing Costs?

Universal Credit Housing Costs, or Housing Payment, is available through the Department of Work and Pensions (DWP). Those in need of further help with housing costs can apply for a housing payment once they are approved for Universal Credit.

A housing payment can help in the following ways:

  • Paying rent directly to a private landlord
  • Paying rent and some service charges if you rent from a housing association or local authority
  • Interest payments on your mortgage and some service charge if you or your partner own the property you live in

Be aware that Universal Credit has replaced a number of benefits and tax credits in the UK. One of the benefits it is replacing is House Benefits.

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Am I Eligible For It?

If you already receive UC, you can apply for housing payments on your online account. If you are not yet receiving UC, you must first apply for this before applying for a housing payment.

If you are receiving Housing Benefits, these payments will be stopped by the DWP and replaced with Universal Credit.

To claim Universal Credit, your circumstances will be assessed. It could be awarded to you if:

  • You are out of work
  • Are working but self-employed or part-time
  • Are unable to work, for example, due to a health condition

However, you may not be able to claim if:

  • You have savings and investments over £16,000
  • Are under the age of 18 (there are some exceptions for 16 and 17-year-olds)

If you live with your partner, your will need to make a joint claim for your household. This is the case even if your partner is not eligible. You will then be assessed on your eligibility together. This takes into account your partner’s savings in addition to your own.

You can only get help when you own your own home if you have been claiming Univeral Credit for 39 weeks or more. This must be without earning any income, taking breaks from UC or receiving sick pay or a tax refund.

What Do I Need to Claim?

Once you’ve applied, you may be asked to attend an interview at your local job centre. You will need to bring with you various documents to support your claim.

If you are renting you will need:

  • A current tenancy agreement, rent statement or rent book
  • A signed letter from your current landlord confirming you live there legally and pay ren
  • Details of any service charges you are expected to pay (for example, to a housing association)

Be aware that if you live in social rented property you won’t be required to bring anything to the interview. You will instead need to enter your housing costs online. The DWP will contact your landlord for confirmation

If you own the home, you may be asked to supply:

  • A current mortgage agreement, statement or bank statement showing payments made on the mortgage
  • Details of any loans secured on the property if you are the owner.

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How Much Financial Help Can I Get?

How much of a housing payment you are given will depend on your individual circumstances.

When renting, the amount you receive will be based on where you live, your household size, any income and your circumstances.

Be aware if you are under 35, don't live with a partner and live in private housing. Usually, you will only be given the amount for renting a single room in a shared house in your area. This is the case even if you do not live in shared housing. This is called the “Local Housing Allowance shared accommodation rate (SAR).”

However, you may be entitled to more financial help if:

  • You like with someone who is dependent on you (for example, a child)
  • Are a care leaver under 25
  • Previously lived in a hostel for the homeless for at least 3 months
  • You are an ex-offender managed under an active Multi-Agency Public Protection Agreement
  • You are getting the daily living component of Personal Independence Payment (PIP)
  • You are getting the care component of Disability Living Allowance (DLA) at the middle or highest rate
  • You receive an Attendance Allowance or Constant Attendance Allowance
  • You are getting Armed Forces Independence Payment
  • You are a victim of domestic abuse
  • You are a victim of modern slavery

If You Own Your Home

For those applying for help with mortgages, the funds allocated are provided as a loan. However, you will only be asked to repay this if the property is sold or transferred to someone else. The amount you receive will depend on the outstanding amount on your mortgage. The amount of financial help you are given is usually calculated using a standard interest rate.

If you are the owner of a leasehold property, you may be entitled to help with service charges associated with the home. This falls under the UC housing element.

Additional Support

If you are still struggling to pay rent or are moving and need help with a rent deposit, you may be eligible for a Discretionary Housing Payment.

Those needing help with their mortgage can also apply for Support for Mortgage Interest (SMI).

For more information on the financial help available when it comes to housing see our article: Financial Help with Moving House Costs

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How are Housing Costs Paid?

If you are renting, the housing cost element is usually paid as part of your Universal Credit. It is your responsibility to ensure your landlord is paid for rent due.

If you’re behind on your rent, your housing payment can be sent directly to your landlord. This is called an alternative payment arrangement (APA).

For those who own their own home and need help with their mortgage, the housing payment is usually paid to the mortgage lender.

Adele MacGregor

Having worked at Compare My Move for over four years, Adele covers topics such as the conveyancing process across the UK, property surveys, home moves and storage.

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