Report

Saving private renters

This report from UK think tank the Resolution Foundation makes the case for the Government unfreezing Local Housing Allowance.

Local Housing Allowance (LHA), which caps how much support is provided through the social security system to low-income private renters, was last relinked to the 30th percentile of rents in April 2024, and has been frozen in cash terms ever since. But private rents have risen considerably since then. [1] A low-income family renting a typical two-bedroom home faces a shortfall of £158 a month, and the gap between average rents at the lower end of the market and the housing support a private renter can receive via the benefit system is set to reach a record high of 23 per cent this October.

Governments of various persuasions have claimed that LHA rates feed through to rents, inhibiting policy makers from relinking housing support in the fear that the increase would pass through to landlords. But new analysis of the April 2024 LHA uplift suggests only a small share of increased support is captured by landlords, with a central estimate of around 10p in every pound of the uplift feeding through to higher rents at the bottom of the market. Consistent with this, the share of low-income private renters whose LHA fell short of their rent dropped from 67 per cent just before the LHA increase to 46 per cent a year later, and was still below its pre-uplift value in May 2026.