The Government has been warned that its ongoing refusal to ‘unfreeze’ its official Local Housing Allowance rate for private renters in receipt of benefits is causing extra poverty and rent hardship for many people.

So says the National Residential Landlords Association (NRLA), which reveals within new research that 48% of those in receipt of housing benefit and/or the housing element of Universal Credit have to make up the difference between these payments and the rent they pay.

LHA rates were ‘unfrozen’ by previous Chancellor Jeremy Hunt starting in May 2024 following years of no change, but were then ‘refrozen’ by Labour’s Rachel Reeves seven months later.

The NRLA figures suggest this brief unfreezing of LHA rates led to a narrowing of the gap – Shelter claimed 12 months ago that 58% of renters faced a shortfall while the NRLA now say it’s 48%.

Nevertheless, the NRLA has written to Work and Pensions Secretary Liz Kendall MP to highlight the problems that the ongoing ‘gap’ causes for tenants and, although its letter doesn’t mention it, the rent arrears that landlords and letting agents face as a consequence.

Affordable properties

The letter also refers to figures from the Institute for Fiscal Studies indicating that the last time LHA rates were frozen in 2023, only five per cent of rental properties were affordable to those claimants in receipt of LHA.

The Joseph Rowntree Foundation has also recently claimed that freezing LHA rates for the duration of this Parliament – i.e. until 2029 – will pull 50,000 renters into poverty; that 60,000 will be pushed into deep poverty and that 80,000 will be pushed into ‘very deep’ poverty.

The NRLA warns that freezing LHA rates will serve only to undermine the ability of claimants to prove their ability to sustain a tenancy, particularly amid intense competition for a limited supply of rental homes.

It is calling for rates to be re-pegged to at least the lowest 30 per cent of rents for the duration of this Parliament.

“It beggars belief that ministers are making it harder for those reliant on housing benefits to sustain their tenancies, especially in an already fiercely competitive rental market,” says NRLA chief executive Ben Beadle.

“Tenants shouldn’t be expected to endure the uncertainty of not knowing what support they can access from one year to the next. It is time to end the insecurity they face and unfreeze housing benefit rates.”