Unfreezing LHA rates won’t push up rents – NRLA

Freezing Local Housing Allowance (LHA) has not prevented private sector rents from rising faster, according to an analysis from the National Residential Landlords Association (NRLA).

It found that average weekly rents increased by 2.5% a year between 2008/09 and 2015/16, when LHA rates rose in line with rents each year.

Between 2016/17 and 2024/25, when the allowance was frozen for all but two years, the annual increase averaged 3.4%.

The findings come as ministers consider whether LHA rates should remain frozen from April next year.

LHA rent link

The NRLA’s chief executive, Ben Beadle, said: “Our analysis clearly shows that unfreezing housing benefit rates does not lead to an explosion in private sector rents.

“The reality is that rent levels are determined by a wide range of factors including tax and mortgage rates, demand from tenants and the costs of adhering to regulations.”

He added: “Freezing housing benefit rates merely locks many of those financially squeezed out of rental housing altogether and undermines all efforts to tackle the scourge of homelessness.

“It is time for the government to act and unfreeze housing benefits to reflect housing costs as they actually are, not as they were in the past.”

Housing benefit freeze

LHA was introduced in April 2008 to help claimants meet the cost of the lowest 50% of rents in their area, before being cut to the lowest 30% in April 2011.

Rates were realigned with the bottom 30% of rents in 2024/25, but the previous government froze the support available again from April 2025.

The charity Crisis suggests fewer than 2% of private rented properties are affordable to people receiving the benefit.

Around a quarter of private renters receive housing support towards their rent.

Cost of uprating

The Institute for Fiscal Studies estimates that maintaining LHA at the bottom 30% of rents would cost £1.5 billion a year, compared with the £2.8 billion councils spent on temporary accommodation in 2024/25.

The Resolution Foundation estimates that restoring rates to that level could lift 75,000 children and 125,000 adults out of poverty.

Raising LHA to cover the lowest 50% of rents could lift 130,000 children and 215,000 adults out of poverty, according to its figures.

The IFS has also separately warned that a tight fiscal environment is ‘no excuse for a system that creates uncertainty for renters and unfairness between local areas’.