The government’s decision to freeze housing benefit rates next year, leaving private tenants facing financial hardship, has been labelled “nonsensical”.

Although the move not to uprate Local Housing Allowance (LHA) wasn’t announced in yesterday’s Budget, it has been confirmed by Work and Pensions Secretary Liz Kendall.

NRLA policy director Chris Norris (main image) believes it doesn’t make sense to provide support for housing costs that bear no resemblance to rents as they actually are. “Coupled with tax hikes on the supply of homes to rent, announcements today will make it hardest of all for those claiming benefits to access and sustain tenancies in the rented sector,” says Norris.

The benefit was frozen from 2020 until former chancellor Jeremy Hunt tweaked it in his Autumn Statement last year to cover the bottom 30% of market rents from April.

Outstripping

However, sharply rising private rents have led to them significantly outstripping the LHA cap, meaning that almost every group within the PRS has argued that the gap has become so great that it has been driving homelessness.

Paul Kissack (pictured), chief executive of the Joseph Rowntree Foundation, says the Chancellor’s actions won’t be enough to fix the foundations for millions who struggle in devastating hardship.

“It’s deeply worrying that we haven’t seen changes to social security that will seriously bring down hardship,” he adds. “In particular, private renters will feel let down by the choice to keep Local Housing Allowance frozen meaning that it will become further out of step with local rent levels, which have soared in recent years.”

The charity’s research found renters would be £243 worse off in 2025/26 and £703 poorer by the end of parliament in 2029 if LHA remains frozen. That would see 50,000 private renters in poverty, including 30,000 children, over the next five years, the organisation claims.

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