The Housing Costs Element for a claimant renting a private tenancy is based on their Local Housing Allowance.
However if their actual rent is below their Local Housing Allowance the DWP will use this lower rate
This means the amount of Housing Costs Element included in the Universal Credit calculation for a private tenant will depend on the size of property they are deemed to need, regardless of the size of property they are actually living in, and the range of rents for a rented property of that size in the area they are living in.
Some claimants are deemed to need only a room in a shared house (the Shared Accommodation Rate); and regardless of family size no-one is regarded as needing a home with more than four bedrooms
NOTE: Not a benefit issue but worth knowing about
From 1st June 2019, for private tenancies, the Tenant Fees Act 2019 comes into force. Private
Landlords will not be able to charge admin fees for references, credit
or immigration status checks, contract renewal or leaving at the end of a
contract (thought they can make a "reasonable" charge for ending a
tenancy early, late rents, and other costs). There will be a cap of one
week's rent for a holding deposit; 6 weeks' rent for security deposits.
Failure to comply can incur fines of up to £5000 (first offence) or up
to £30,000 (subsequent offences.) Tenant Fees Act guidance here.