Man £450 short on rent after housing allowance

Steve Michelides lives alone in a privately rented flat in Thornton Heath

A man left unable to work after a life-changing car crash faces a £450 shortfall in his rent every month, despite receiving Local Housing Allowance.

The crash 18-years-ago left Steve Michelides with severe spinal injuries, and the scar across his torso is a "daily reminder of the accident".

Mr Michelides, a former sales executive, lives alone in a privately rented flat in Thornton Heath, south London, but rising rents mean his benefits fall far short of covering his costs.

The government says it is "tackling the impact of rising rents", but the Local Housing Allowance has been frozen on and off for years, meaning it has not kept pace with the market.

'Rent has to be paid'

Mr Michelides, 46, said: "The total rent shortfall I have is £450 per month, every month. That has to be paid and that is offset by my Universal Credit.

"So when it comes to payday, I use 84.5% of my total monthly expenditure, leaving me with about as much as I would spend on a night out before becoming dependent on benefits."

Private renters' support is capped by the Local Housing Allowance, which is intended to cover the cheapest third of properties in an area – but the allowance has been frozen for years, leaving it far behind rising rents.

Housing charities and councils called for the freeze to be lifted in the Budget, following an inquiry into the financial sustainability of local government in July 2025.

No changes were announced, but a government spokesperson said: "We're tackling the impact of rising rents and the housing shortage with our commitment to build 1.5 million homes – including the biggest boost to social and affordable housing in a generation.

"We are also investing more than £1bn in homelessness services, launching a cross-government homelessness strategy, and investing a record £39bn in affordable and social housing."

'Catastrophic impact'

Sam Thomas, senior policy adviser at anti-poverty charity Z2K, said the freeze was driving homelessness.

He said evidence showed that when the government unfroze Local Housing Allowance in 2023, there was a reduction in the number of people becoming homeless.

He added: "For people who are already in temporary accommodation, one of the most common ways they get rehoused and out of temporary accommodation is by moving into the private rented sector, but because of the freeze on Local Housing Allowance, that becomes harder and harder."

Jonathan Carr-West, chief executive of the Local Government Information Unit, said the freeze was having a "catastrophic financial impact" on local authorities.

He said: "The gap between what they get from government to subsidise temporary accommodation and what they have to spend to pay for that temporary accommodation is over £700m a year across London.

"That means local authorities are having to use their general funds to fill that gap – and that means less money for everything else."

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