The government sets the LHA rates that apply to housing element of UC. The rental markets sets the market rate of rent, ie what private tenants are willing to pay. The LHA is on average probably 20% below what self funding private tenants are willing and able to pay. By setting LHA so far below market rates the government are effectively confirming private rentals are unaffordable for those that depend on UC.
The regulations also mean landlords aren’t willing to take a risk given it takes so long to evict a bad tenant. I do have good long term tenants who are on UC and i do agree with a lot of what you say but rule changes (lower deposits, longer eviction times) along with interest and tax increases just means it isn’t worth the risk anymore so i will probably sell when each tenant leaves.