Backlash grows over continued frozen LHA rates

Landlord and tenant organisations have criticised the Chancellor Rachel Reeves for freezing local housing allowance (LHA) rates in the Autumn Budget.

The government has confirmed housing benefit rates will remain frozen for a second year in a row in 2026/27.

Generation Rent, Shelter and the National Residential Landlords Association (NRLA) say the move will hit low-income tenants the hardest.

Only 1% of London rental homes are affordable under LHA rates

Despite a joint letter from the NRLA, Shelter, Crisis and 40 other organisations urging the Labour government to reinstate LHA rates to cover at least the lowest 30% of rents from next year, the Chancellor ignored the appeal.

LHA determines how much rent support claimants can receive, and since the rates were frozen in April, they haven’t kept pace with rent prices.

According to government data, almost 1.7 million private rented households across the country were receiving housing cost support as of August this year, and 53% of these households faced a gap between their housing benefit payments and their monthly rent.

As previously reported on Property118, only 1% of London rental homes are affordable under LHA rates.

Deeply regressive package

Ben Beadle, chief executive of the NRLA, warns that the current freeze on LHA rates, combined with a 2-percentage-point increase in taxes on dividends, property, and savings income in the Autumn Budget, will ultimately harm renters.

He said: “It beggars belief that the government thinks it is helping renters.

“Piling on further tax rises that will drive up rents, whilst keeping housing benefit rates frozen, is a one-way street to hitting low-income tenants the hardest.

“This can only be described as a deeply regressive package that will make life more difficult for renters across the country.”

Sarah Elliot, chief executive of Shelter, also criticised the government for not unfreezing LHA rates.

She said: “The Chancellor raised the scandal of children in damaging temporary accommodation, but the failure to unfreeze local housing allowance rates will condemn thousands to another grim winter without a secure home. Even more people will find it impossible to either avoid or escape homelessness in the months ahead unless the government throws them a lifeline.

“Housing benefit is meant to help struggling families afford a roof over their heads, but it’s too far out of sync with the real cost of renting. For the government’s upcoming homelessness strategy to help children out of temporary accommodation, it must do the right thing and unfreeze local housing allowance.”

Continuing freeze of housing benefit means renters will be forced into heartbreaking choices

Ben Twomey, chief executive of Generation Rent, welcomed the government’s plan to scrap the two-child benefit cap but warned freezing the LHA rates will worsen the housing crisis.

He said: “The two-child benefit cap and frozen housing benefit rate have pulled hundreds of thousands of families into poverty. Ending this cruel and arbitrary policy is the right thing to do, giving families across the country some breathing space.

“But the continuing freeze of housing benefit means many renters will still be forced into making heartbreaking choices between heating and eating in order to pay their rent.”