Housing benefit freeze under pressure as rents rocket across UK

The National Residential Landlords Association (NRLA) says there is no clear link between the amount of housing support available and rent increases, challenging concerns that increasing benefits could simply push rents higher.

The analysis comes as the Government considers the future of Local Housing Allowance (LHA), which determines how much housing support some private renters can receive.

Successive governments have frozen LHA rates as part of efforts to control welfare spending.

But the freeze has left many households struggling to find properties within the level of support available.

Homelessness charity Crisis has estimated that fewer than 2% of private rented properties are affordable for people receiving housing benefit.

Rents rose faster during the housing benefit freeze

The NRLA’s analysis compares rent increases during periods when LHA rates were linked to local rents with the years when they were largely frozen.

LHA was introduced in 2008 with the aim of helping claimants cover the cost of the cheapest 50% of rents in their local area.

That was reduced in 2011, with the allowance instead intended to cover the cheapest 30% of rents.

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

By comparison, average weekly rents increased by around 3.4% a year between 2016/17 and 2024/25, when LHA rates were frozen for all but two years.

Across England, average weekly rents rose from £153 to £184 between 2008/09 and 2015/16.

That was an increase of £31, or around 20.3%, over the eight-year period.

Between 2016/17 and 2024/25, average weekly rents increased from £192 to £250, a rise of £58 or 30.2%.

The figures do not establish that freezing or increasing housing benefit causes rents to rise or fall, but the NRLA argues they show there is no evidence of an automatic surge in rents when LHA rates are increased.

Your Top 12 Cost of Living Concerns

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What is Local Housing Allowance?

Local Housing Allowance is used to calculate housing support for eligible private renters.

When it was introduced in 2008, it was designed to help cover rents up to the 50th percentile of local rents.

The system was changed in 2011 to cover the 30th percentile instead.

LHA rates were brought back into line with the bottom 30% of local rents in 2024/25.

However, the previous Government then decided to freeze housing support from April 2025, breaking the link between the amount available and current rent levels once again.

Around 24% of private renters receive housing support to help with their rent, according to the English Housing Survey.

£1.5bn cost of restoring housing benefit link

The Institute for Fiscal Studies (IFS) has estimated that restoring and maintaining LHA rates at a level covering the cheapest 30% of rents would cost around £1.5 billion a year.

That is just over half the £2.8 billion spent by councils on temporary accommodation in 2024/25.

Supporters of increasing LHA rates argue that better aligning housing benefit with actual rents could reduce the pressure on councils caused by homelessness and temporary accommodation.

The Resolution Foundation has also estimated that restoring LHA to cover at least the cheapest 30% of rents could lift 75,000 children and 125,000 adults out of poverty.

Increasing support to cover the cheapest 50% of rents could lift an estimated 130,000 children and 215,000 adults out of poverty.

Government faces decision on housing benefit

The debate comes as ministers consider whether housing benefit rates should remain frozen from April next year.

Andy Burnham, during his Labour leadership campaign, previously criticised the current system.

He said: “We are forced to chase rents in the private-rented sector through the benefits system.”

He argued that freezing Local Housing Allowance could leave families facing homelessness while putting additional pressure on councils to provide temporary accommodation.

The issue also presents a difficult balance for policymakers, with the Government facing pressure to control welfare spending while councils continue to deal with the cost of homelessness and temporary housing.

Stark stats from @genrentuk today, which illustrate Burnham’s biggest cost-of-living problem:

At £1442, the average monthly rent in England is thirteen times higher now than it was in 1988, when it was £111.

A 500g pack of cheddar cheese would cost £19.50 compared to £4.31 if…

— Vicky Spratt (@Victoria_Spratt) July 23, 2026

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Landlords’ group calls for benefits to be unfrozen

Ben Beadle, chief executive of the NRLA, said the organisation’s analysis challenged the idea that increasing housing benefit would automatically drive up rents.

“Our analysis clearly shows that unfreezing housing benefit rates does not lead to an explosion in private sector rents,” he said.

He added that rents are influenced by a range of factors, including tax and mortgage rates, tenant demand and the costs of complying with regulations.

Mr Beadle said freezing LHA rates could instead prevent some people from accessing private rented accommodation.

“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,” he said.

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He called on ministers to increase housing support to reflect current rental costs.

“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,” he said.

The IFS has separately warned against repeatedly freezing LHA rates, saying a tight fiscal position should not prevent the Government from considering other approaches.

The think tank said: “A tight fiscal situation is no excuse for a system that creates uncertainty for renters and unfairness between local areas.”