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Universal Credit (UC) housing costs element

Universal Credit (UC) housing costs element can help with rent and some service charges if you are a tenant. If you are a homeowner you can receive help with your mortgage interest payments in the form of a Support for Mortgage Interest Loan.

1. What is the Universal Credit (UC) housing costs element?

This money is to help you with your housing costs.

It can help with rent and some service charges if you are a tenant.

If you are a homeowner you can't get the housing costs element to help with mortgage payments, but you might be able to get it for ground rent and service charges. Homeowners might be able to get help with mortgage payments in the form of a Support for Mortgage Interest Loan.  Interest will be charged on the loans.  Loans will be repaid upon the sale of a claimant’s house; or on transfer of ownership of the property. Read our Support for Mortgage Interest Loan guide for more information.  

Applies to: England, Scotland, Wales, and Northern Ireland

 

Administered by: Department for Work and Pensions

 

Updated: April 2019

2. Can I get Universal Credit (UC) housing costs element?

Tenant

If you are a tenant you have to be the person who is responsible for paying the rent to get help with your housing costs.

You will not usually qualify for help with housing costs if you:

  • live in the home of a close relative
  • are a full-time student (unless you have a disability or have children)

Homeowner

If you are a homeowner you must not have any earned income. If you are making a claim as a couple, if either of you have any earned income, of any amount, you will not qualify for a housing costs element.  Owner-occupiers, who are leaseholders, can still receive help with some service charges through Universal Credit Housing Costs Help.  Owner-occupiers with a mortgage have the option of applying for a Support for Mortgage Interest Loan for help with the mortgage interest.

 

Updated December 2018

3. Universal Credit (UC): How much will I get? I'm a private tenant

Your housing costs will be calculated using the Local Housing Allowance (LHA) for your area.

There will be a LHA rate set based on rental prices in your area and the number of rooms you need based on the size of your benefit household (ie you, your partner if you have one and your children who live with you). 

For example, if you are single, don't have any dependent children and are aged under 35, in most cases your LHA will be based on one room in shared accommodation.

This could mean that your housing costs element will not cover all of your rent if your home is larger than you need or too expensive.

You can visit the LHA Direct website (link opens in new window) to find out what your Local Housing Allowance is.

 

Updated June 2017

4. Universal Credit (UC): How much will I get? I'm a social tenant

Your housing costs element will be based on your eligible rent. However, a size restriction is applied when calculating your award. This means that your eligible rent may not be taken into account in full if it's considered you have more bedrooms than your household actually needs.

You are allowed one bedroom for each category shown below:

  • each adult couple
  • each person over 16
  • two children of the same sex under 16
  • two children under 10, regardless of their sex
  • any other child
  • an overnight carer you need but who doesn't normally live with you.

If your home is considered to be too big for you, your eligible rent which is used for the calculation will be reduced by:

  • 14% if you have one spare bedroom
  • 25% if you have two or more spare bedrooms.

Households protected from this reduction:

  • Foster carers who have had a child placed with them, or have registered as a carer, in the last 12 months
  • Parents of armed forces personnel while their child is away on duty
  • Parents of a severely disabled child unable to share a room with a sibling

 

5. Universal Credit (UC): How much will I get? I'm a homeowner

Owner-occupiers, who are leaseholders, can get help with service charges paid as a housing element within Universal Credit. You normally have to serve a waiting period of approximately nine months from the date of your Universal Credit claim, before you can receive this help.

However, help with mortgage interest payments is now in the form of a loan on which you will be charged interest. Please read our Support for Mortgage Interest Loan guide for more detailed information about this loan. Here are a few details: 

Maximum loan amount

There is an upper limit on the total loan amount that can be included in your claim. The upper loan limit is £200,000. Your housing costs element will therefore be based on your total loan amount owed, or £200,000, whichever is lowest.

Standard Interest rate

The Support for Mortgage Interest Loan, which is help with interest payments on mortgage, home purchase loan, or qualifying home improvement loan, are calculated using a standard rate of interest, not your lender’s actual interest rate for your loan. This means that if your interest rate is higher, there may be a shortfall between the help provided and your contractual payment.

The current rate of interest used when calculating help with housing costs is 2.61%.

Calculation

Your housing costs element will be your loan amount owed (or £200,000) multiplied by the standard interest rate, divided by twelve in order to get the monthly amount.

There are restrictions on the help provided if your mortgage or loan was taken out or increased after you became entitled to Universal Credit, or if your housing costs are deemed excessive.

Waiting period

You will not receive a housing costs element for the first nine months after qualifying to have one included in your award. This is called a 'qualifying period'.

If you were receiving Jobseeker's Allowance or Employment and Support Allowance immediately prior to your Universal Credit claim, the time spent on that benefit can count towards your qualifying period.

Repaying the loan

Support for Mortgage Interest Loans together with the interest charged on the loan has to be repaid upon the sale or transfer of ownership of a claimant’s house.  Please read the repayment section of our Support for Mortgage Interest Loan guide for more information.

Service charges 

Universal Credit claimants will be able to get help with some eligible service charges  through the housing costs element of Universal Credit.  This is a part of your Universal Credit and is not a loan.

 

Updated May 2019
 

 

6. Universal Credit (UC): What if I have another adult living with me?

If you have other adults living with you who aren’t your partner and do not have to pay rent, they might be treated as your non-dependent.

This means that an amount will be taken off your housing costs element  because this other person is expected to help with the rent. The Department for Work and Pensions (DWP) call this a Housing Costs Contribution. 

You won’t have money taken off your housing costs element  for a non-dependent if:

You also won’t have any money taken off your Housing Benefit for any other adult who:

If money is taken off your Universal Credit for a non-dependent, it will be taken at £73.89 per month for each other adult in your home.
 

7. How will I be paid the Universal Credit (UC) housing costs element?

England and Wales

If you live in England or Wales and are getting help with your rent or service charges through Universal Credit, the housing costs element will usually be paid straight to your bank account. It will be your responsibility to make sure the right amount for your rent is paid to your landlord. 

If you think you are going to struggle to make sure the money for your rent does reach your landlord, you can ask for the amount for your rent to be paid direct to your landlord. This is called an Alternative Payment Arrangement or a Managed Payment to Landlords.

If you have a work coach. you should ask them about arranging to pay your rent direct to your landlord. If you don’t have a work coach, you should call the Universal Credit helpline on 0800 328 5644. You will need to explain in detail why you are struggling to manage your money on your own. If you have other debts, addiction problems or mental health difficulties you should explain this. 

If your request to have your rent money paid direct to your landlord is turned down, you can ask for the decision to be looked at again by the Department for Work and Pensions (DWP), but you cannot appeal it to an independent tribunal. If you are in this position, you should speak to an adviser to see if there is anything more you could do.

Scotland

If you live in Scotland, you can have your housing costs element paid direct to your landlord. You can’t set this up until after you have received your first payment of Universal Credit. You should write a note on your Journal asking for your housing costs element to be paid direct to your landlord. If your housing costs element is less than your rent, you will still be responsible for making sure the rest of your rent is paid in full and on time to your landlord.

Northern Ireland

In Northern Ireland your rent will be paid direct to your landlord unless you choose to opt out of this and have your rent paid to your own account. If your housing costs element is less than your rent, you will still be responsible for making sure the rest of your rent is paid in full and on time to your landlord.

Further help

If you need extra help to cover your rent, you may be able to claim Discretionary Housing Payments from your local authority.

Updated: September 2019