LHA freeze will hit low-income renters the hardest

The government has confirmed that Local Housing Allowance (LHA) rates will remain frozen for 2027-28, with no increase in support for renters.

Work and Pensions Secretary Pat McFadden confirmed that LHA rates will be maintained at their current levels.

Tenant groups have labelled the move “disappointing”, warning that it will hurt renters.

Low-income renters hit hardest

According to the Resolution Foundation, the average shortfall between Local Housing Allowance (LHA) rates and the lowest 30 per cent of rents has reached an all-time high of 23.3%.

For a typical family renting a two-bedroom home, this represents an ‘affordability gap’ of £170 a month.

Ben Beadle, chief executive of the National Residential Landlords Association (NRLA), says the failure to unfreeze LHA rates in the Budget will hit low-income renters the hardest.

He said: “The idea that the government is providing breathing space for any rented households is just a farce.

“Tax hikes leading to higher rents, coupled with doing nothing to unfreeze housing benefit rates, will leave low-income renters hit hardest by the Budget.

“Quite simply, this is a regressive Budget for renters.”

Hugely disappointing

Generation Rent, chief executive, Holly Williamson said: “Homes are the foundations of our lives, so it is hugely disappointing the government has maintained the freeze of Local Housing Allowance. When housing benefit doesn’t cover the rent it forces families into impossible decisions, traps them in poverty and leaves them vulnerable to homelessness, with councils picking up the pieces.

“This decision also brings into question the government’s goal of ending rough sleeping, as it will mean there are very few affordable long-term homes for people currently sleeping rough.

“The government must tackle the root cause of the rental affordability crisis in our country by limiting annual rent increases, ensuring rents cannot continue to rise faster than wages and helping reduce the long-term cost to the taxpayer.”