Landlords face widening Local Housing Allowance gap
2 months ago
Housing benefit changes will help thousands claims government
12:01 AM, 7th October 2026, 3 weeks ago
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Prime Minister Andy Burnham has claimed a “common-sense change” will leave those in supported housing and temporary accommodation “better off”.
New rules coming into force this week mean more than 325,000 residents in supported housing and temporary accommodation will no longer face a drop in income when they increase their working hours.
Under the previous system, people living in supported housing and temporary accommodation often receive help with their day-to-day living costs through Universal Credit, while support for their rent was paid separately through Housing Benefit.
A cliff edge
The two systems had different rules on how much someone could earn before their benefits were reduced, with Housing Benefit less generous than Universal Credit.
That meant some residents moving into work or taking on more hours could see their Housing Benefit cut faster, leaving them worse off despite earning more.
The government says this created a “cliff edge”, with the risk of losing housing support discouraging some people from taking on more work. The new regulations change how housing benefit is calculated, bringing it in line with Universal Credit.
Prime Minister Andy Burnham said: “People should never have to choose between keeping a roof over their head or being able to work. But the system has been rigged against some of the very people trying their hardest to get on, particularly young people starting out, who are being left worse off for earning more.
“We’re putting that right through a common-sense change that will help people keep more of what they earn. This is what progressive welfare reform looks like: helping people into work and giving families the security and breathing space they need to get on. That’s how we make Britain better off.”
End homelessness for good
Homelessness minister, Florence Eshalomi, added: “We’re investing over £4 billion to end homelessness for good, and employment is an important step in many people’s recovery. This is a crucial intervention that supports this mission, helping people into secure work or increase their earnings from work, in turn building lasting independence.
“We’ll continue to support people in temporary accommodation by ensuring that safe, stable placements are available to all who need them, tackling the unlawful use of B&Bs for families and improving access to vital support services.”
The government says new earned income disregards are being introduced for working-age people in supported housing and temporary accommodation. This means more of their earnings will be ignored when housing benefit is calculated, allowing support to taper off more gradually as their income rises.
For example, a single claimant aged 25 or over will have £77.73 of their weekly earnings disregarded, while a couple with at least one person aged 25 or over will have £119.70 disregarded. These amounts will be increased each year in line with changes to Universal Credit.
4 comments on this article
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Member Since October 2022 - Comments: 278
12:05 PM, 7th October 2026, About 3 weeks ago
They need to make HB part of UC and have it index-linked like other benefits, instead of the ridiculous year by year erosion of the real value. And link it to the real 30th percentile, not some fantasy figure from 5 years ago.
Where I live, the housing allowance is £410 for a single bedroom dwelling. There is literally one property advertised at this price (only on Rightmove) and that is a grotty-looking social housing 1 bed flat reserved for the few “lucky” enough to get it. It’s then followed by £468 for another 1 bed flat by the same social provider. Private 1 bed flats are £500 – £550, taking a massive chunk out of the money meant for essentials like food. Openrent similarly starts at £525 for 1 bed flats in the area. It’s a similar picture with shared accommodation, with the very cheapest rent in the worst area of town still £50 above LHA and anything else at least £80 more.
Member Since June 2017 - Comments: 162
6:02 PM, 12th October 2026, About 2 weeks ago
Brilliant. Where’s the extra benefit funding money coming from?
Member Since October 2022 - Comments: 278
9:34 PM, 12th October 2026, About 2 weeks ago
Reply to the comment left by Landlord Phil at 12/10/2026 – 18:02
Granted it’s a considerable upfront cost, but the long-term benefits would likely outweigh the costs long term. Extra financial stability for UC tenants would mean far less arrears, especially if HB were paid directly to the landlord, and therefore less pain to both landlord and tenant, and most likely considerable savings on far more expensive temporary emergency accommodation which has become the de facto safety net. Also over time the better outcomes for families would most likely lead to less costly interventions later on as parents and children are not traumatised by the experience of housing instability that recent governments have been complicit in (and blamed unfairly on landlords).
Member Since October 2024 - Comments: 240
6:11 PM, 17th October 2026, About 1 week ago
I don’t wish to depend on UC tenants but that seems to be the future for some properties. I had students but now with RRA, overseas students would not be allowed to pay 6 months in advance. I found for each property there are 6 sets of student tenants but I had to refuse with lack of UK guarantors.
One of the properties I accepted UC tenants with a huge family . The father had lied that he had 3 children instead of 5 children.
Notice will be given to sell as the fixed rate mortgage is ending next year. So I hope the tenants would leave 4 to 5 months before the fixed rate mortgage comes to an end.
UC tenants have some stability in rental but if the neighbours are not happy then it does not work.
Homelessness will not end as there are not sufficient PRS homes to go around as the council is prioritising foreigners who have been flown from Afghanistan or Palestine at the courtesy of the UK government. The tenants feel entitled.