Over 40 organisations have written to the UK Government calling for housing benefit for private renters to be unfrozen to prevent homelessness and to ease growing pressure on councils.
The letter, signed by groups representing tenants and landlords, urges the UK Government to restore local housing allowance (LHA) rates to cover at least the cheapest 30% of rents.
This would lift 75,000 children and 125,000 adults across the UK out of poverty, according to research conducted by the Resolution Foundation.
LHA rates set a limit on how much support people receiving benefits get to pay their private rent. They are intended to cover the cheapest 30% of private rents in a local area but have been frozen periodically since 2016.
As a result, people on low incomes are facing significant shortfalls between their housing benefit and private rent, leaving them to make difficult choices between paying rent or being able to pay for essentials like food and electricity bills.
The failure for housing benefit to keep up with rent increases is fuelling the homelessness crisis, with 170,000 children stuck in temporary accommodation in England according to the latest Government figures.
Temporary accommodation is often poor-quality, with tenants reporting issues with damp, mould and overcrowding. Moreover, it is depleting local government finances as councils in England spent over £2.7 bn on temporary accommodation placements last year alone (excluding admin costs). This is up 26% on 2023-24.
In addition, the Local Government Association reports that frozen LHA rates have cost councils in England over £700 million in unrecoverable costs over the past five years, with devolved administrations across Scotland and Wales reporting similar pressures.
Organisations including Crisis, the Chartered Institute of Housing and the National Residential Landlords Association, are urging the UK Government to address this problem as ministers consider what level to set LHA levels for 2026/27 in the Autumn Budget.
The organisations claims the freeze on housing benefit for private renters is also having what they describe as “a devastating impact on people’s health.”
Living in poor quality accommodation is often the only option for people on lower incomes who can’t keep up with increasing rents, increasing the chance of respiratory and cardiovascular diseases, as well as stress and mental health problems. Official figures from the English Housing Survey showed that, in 2023, over one million homes in England had problems with cold or damp. Moreover, the financial impact of poor housing is substantial, costing the NHS an estimated £1.4 billion a year.
Matt Downie, chief executive at the charity Crisis, says: “Westminster has made clear its intentions to tackle homelessness and the housing crisis, including a vital commitment of £39 billion for social and affordable housing. However, with nearly 170,000 children living in temporary accommodation in England alone, urgent action is needed to support people who are being pushed to the edge and into homelessness right now.
“Ministers must unfreeze housing benefit at the Autumn Budget, so that it covers at least the cheapest 30% of private rents in a local area. In the immediate term, this is the most effective way to prevent homelessness rising further and to support people into settled homes within the private rented sector.
“Without this, the UK Government risks failing in its efforts to tackle homelessness, and councils will be forced to keep spending billions of pounds each year on poor-quality temporary accommodation.”
Gavin Smart, chief executive of the Chartered Institute of Housing, adds: “Freezing local housing allowance at current levels is pushing many families to breaking point.
“The gap between what people receive in benefit and what they must pay in rent has become unbridgeable in many areas. The UK Government must urgently restore LHA rates – at least to the 30th percentile of local rents – so that no one has to choose between keeping a roof over their head or heating their home this winter.”
