Only 1% of London rental homes affordable under LHA rates

Average rents continue to outpace Local Housing Allowance rates (LHA), pushing families into homelessness, according to a new report.

Data by property consultants SimplyPhi reveal 26,064 properties were available to rent in London, however, only 1% were available to rent at LHA rates.

The news comes after the National Residential Landlords Association (NRLA) and Shelter, along with other organisations, have written to Prime Minister Keir Starmer calling on the government to reverse the freeze on Local Housing Allowance (LHA) rates.

Drop in housing supply in London due to uncertainty in PRS

According to the findings, there is a significant monthly shortfall between average market rents and LHA rates across England, ranging from £412 to £1,229 per month.

Across England, only 1.7% of private rental homes on the market were available at LHA rates, equivalent to just 1,041 out of 75,998 properties, representing a 10% decline in the number of affordable supply compared to last quarter.

The data also reveals a drop in supply in London with 4,517 (5%) fewer properties available to rent in London compared to the previous quarter.

SimplyPhi says this is down to uncertainty in the private rented sector over the upcoming Renters’ Rights Bill and the abolition of Section 21.

London remains England’s most expensive and unaffordable rental market with the average rent of £3,095 per and an average LHA rate of £1,796 per month.

Lack of affordable housing severely limits the ability to secure suitable homes

Omar Al-Hasso, chief executive at SimplyPhi, says the findings show more must be done to tackle the housing emergency.

He said: “The lack of affordable housing severely limits the ability to secure suitable homes, pushing more families into expensive, overcrowded, or unsuitable housing.

“This quarter’s data highlights the housing emergency is far from receding and in fact is accelerating, with the affordability gap widening and temporary accommodation usage hitting record highs.

“The scarcity of affordable homes demands urgent systemic intervention and a new approach to housing provision. Coordinated, large-scale solutions between key stakeholders, including institutional investment, are needed to strengthen affordable supply and close the affordability gap.”