Shelter Cymru warns of increased homelessness risk from UK Government housing benefit freeze

Shelter Cymru warned on 4 February 2025 that families in Wales face an increased risk of homelessness after the UK Government decided to freeze housing benefit levels¹. The charity said the freeze would limit the financial assistance available to private renters and could push households into arrears¹.

The Welsh Government has said the freeze will leave low-income households in Wales facing average shortfalls of £604 between the estimated cost of renting a home and the amount of support they receive¹. Shelter Cymru said the gap is wider in some areas: a family needing a four-bed home in Newport faces an annual shortfall of more than £3,000, while a family looking for a three-bed in Wrexham will need to find almost £900 on top of what they are eligible for¹.

The warning comes as average private rents in Wales rose by 8.5% over the last year¹. Shelter Cymru said the decision affects tens of thousands of privately renting households in Wales, including people in work who still rely on housing benefit¹. The charity also said 1 in every 215 households in Wales is already in temporary accommodation, and that its own 2024 research found the cost of providing temporary accommodation to homeless families has more than doubled in the past three years to almost £100 million¹. It said 45% of households coming to it for support are private renters¹.

Ruth Power, chief executive of Shelter Cymru, said:

She added that the charity is urging Welsh Ministers, Senedd Members and MPs to lobby the UK Government to change its mind and uplift rates, and that the Welsh Government should set out a vision for the private rented sector and increase investment in new social homes¹.

Why it matters for households

Housing benefit and the housing element of Universal Credit are capped at Local Housing Allowance rates, which are set by the UK Government and had been frozen for the year from April 2025¹. For private renters in Wales whose rent is above the rate that applies to their area and household size, the difference has to be met from other income. The shortfalls Shelter Cymru cites are averages and examples: £604 a year on average across Wales, more than £3,000 a year for a four-bed home in Newport, and almost £900 a year for a three-bed in Wrexham¹. The charity says the households affected include working people who claim support towards their rent¹. The freeze takes effect for the 2025 to 2026 financial year¹.

What happens next

Shelter Cymru said it is urging Welsh Ministers, Senedd Members and MPs to lobby the UK Government to change its decision and uplift the rates, and is calling on the Welsh Government to set out a vision for the private rented sector and increase investment in new social homes¹. No further dates have been reported.