Rent caps and housing tribunals demanded to protect tenants on LHA

Up to one million children in the PRS could face poverty by 2026 because of a rent shortfall due to frozen Local Housing Allowance (LHA) rates, a report highlights.

The study from the Institute for Public Policy Research (IPPR) blames the combined impact of welfare changes, a growing number of children in the PRS and a lack of social housing investment.

The organisation is demanding that rent caps and housing tribunals in England be introduced to help prevent poverty numbers rising.

It says that the 2011 reduction of LHA rates, coupled with subsequent freezes, has reduced affordability for a big portion of private rental properties.

The IPPR says that an estimated 440,000 families with children don’t receive enough housing support to cover their rent.

With no planned LHA rate increase in April 2025, this number is projected to climb by another 90,000 families by March 2026, impacting an estimated 925,000 children.

Trapped in a cycle of poverty

The IPPR’s principal economist and author of the report, Henry Parkes, said: “A safe, secure and affordable home should be the foundation for every child’s future.

“Instead, too many families are trapped in a cycle of poverty and instability caused by unaffordable rents and insecure tenancies.”

He adds: “Housing reform isn’t just a moral imperative — it’s an economic necessity.”

The report recommends several policy solutions to address housing issues:

• Increase housing support: LHA rates should be raised to cover the 30th percentile of local rents, and the household benefit cap should be removed from April 2025. The long-term goal should be to increase LHA rates to the 50th percentile
• Strengthen renter protections: A new English housing tribunal should be created to enforce the rights granted to tenants by the Renters’ Rights Bill. Also, a review should be carried out to examine the evidence for formal rent caps
• Expand social housing: 100,000 new social homes should be built annually for 20 years to replenish the social housing stock.

Financial support remains stagnant

The report says that as rents increase but financial support remains stagnant, families must fund the difference.

The study says that poverty numbers have grown from one in 12 children, to one in five in over two decades.

The report also exposes a geographical disparity in LHA rates, with more than half of Welsh families affected, compared to a third in Scotland.

The IPPR also highlights the scarcity of social housing due to the Right-to-Buy scheme introduced in 1979.

Also, social housing waiting lists have reached a 10-year peak of 1.33 million.

Ensuring housing support

It says that building social housing will benefit tenants with full housing costs and secure, long-term homes.

IPPR modelling suggests that building more social homes for families on means-tested benefits could save £3 billion in housing benefit every year.

However, the report also warns that 100,000 social homes will need to be built every year for the next 20 years.