The National Residential Landlords Association (NRLA) has called on the government to lift the freeze on Local Housing Allowance (LHA) in the upcoming Autumn Budget. Chief executive Ben Beadle warned that the current rate of housing benefit no longer reflects real rental costs, leaving low-income tenants unable to access affordable housing.
Beadle explained that by restoring LHA to cover at least the lowest 30% of rents, the government could prevent rent arrears, reduce homelessness, and give landlords more confidence in letting to tenants receiving benefits. He is among 40 signatories of a letter sent to ministers, urging immediate action to restore LHA levels and protect vulnerable renters.
The letter, supported by both landlord and tenant groups, argues that raising LHA would lift around 75,000 children and 125,000 adults out of poverty, based on findings by the Resolution Foundation. LHA rates, which cap the housing benefit available to private renters, are meant to reflect the lowest 30% of local market rents. However, these rates have been frozen multiple times since 2016.
Due to this freeze, many tenants are facing widening gaps between the rent they owe and the support they receive, forcing them to choose between paying rent or covering essential living costs like food and energy. As rents continue to rise, the shortfall is driving more families into homelessness, with government data showing around 170,000 children currently living in temporary accommodation across England.
Temporary housing, often plagued by damp, overcrowding and poor conditions, has become a significant financial burden for local councils. In 2024 alone, English councils spent over £2.7 billion on temporary accommodation, a 26% rise from the previous year. The Local Government Association estimates that frozen LHA rates have cost councils more than £700 million in unrecoverable losses over the past five years.
Organisations including Crisis, the Chartered Institute of Housing (CIH), and the NRLA have jointly appealed to the government to review housing benefit levels for 2026/27. They warn that keeping LHA frozen not only worsens homelessness but also harms public health.
Poor-quality homes, which are often the only option for low-income renters, have been linked to a rise in respiratory illnesses, stress, and mental health issues. The English Housing Survey revealed that in 2023, over one million homes in England were affected by damp or cold. The cost of poor housing is estimated to add £1.4 billion a year to NHS spending.
Matt Downie, chief executive of Crisis, urged ministers to act quickly, noting that despite the government’s £39 billion pledge for social and affordable housing, immediate intervention is needed. He stressed that unfreezing housing benefit would be the most effective short-term measure to stop more families from falling into homelessness.
Downie warned that without action, councils would continue to spend billions on unsuitable temporary housing while families remain trapped in instability. He emphasised that restoring LHA to at least the 30th percentile of local rents is a practical step that could have a real and immediate impact.
Gavin Smart, chief executive of the Chartered Institute of Housing, echoed this sentiment, saying that the gap between benefit payments and actual rents has become “unbridgeable” in many areas. He argued that raising LHA is essential to prevent families from choosing between heating their homes or keeping them.
The NRLA and its allies are hopeful that the Autumn Budget will bring relief to struggling renters. With rising rent pressures and homelessness reaching record levels, housing groups are united in urging the government to make LHA reform a top priority.
If the freeze continues, experts warn that homelessness could rise further, more landlords may leave the rental sector, and local authorities will face growing financial strain. The coming Budget is therefore seen as a crucial opportunity for the government to act decisively and protect those most affected by the ongoing housing crisis.
Ultimately, campaigners say that restoring fairness to housing benefit levels is not just an economic issue but a moral one—ensuring every person has access to a safe, stable, and affordable home.
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