1.1 million families facing housing crunch

Low-income renters are caught in a squeeze as local housing allowance has been frozen since autumn 2024 while rents have climbed. A typical two-bedroom household now faces a £158 weekly shortfall.

“The gap between average rents and Local housing allowance levels is set to reach a record high this October”

London shortfalls reach £300 a week

The gap between what housing allowance covers and actual rent is most severe in London, where some areas see shortfalls exceeding £300 weekly. Families are forced to skip meals and go without heating.

“one in five working-age adults in families on housing support in private rental accommodation were unable to afford to keep their homes warm”

Relinking would help tenants, not just landlords

The Resolution Foundation analysed past changes and found that 90p of every pound in housing allowance increases goes to tenants, not landlords. This counters claims that relinking would mainly benefit property owners.

“90p of every £1 tends to fall to tenants, instead of feeding through into price changes”

Gap could hit 30% by 2028

Without action in the October budget, the shortfall between housing allowance and actual rents will reach a record high and could widen to 30% by March 2028. The freeze has lasted nine of the past 14 years.

“the gap reach 30% by March 2028”

Relinking would cost £2bn yearly

Restoring the automatic link between housing allowance and local rents would cost £2bn annually by the end of parliament in 2029-30. The Resolution Foundation suggests funding it by adjusting how universal credit is withdrawn.

“Relinking LHA to rents would cost £2bn a year by the end of this parliament in 2029-30”

Charities and campaigners unite on the call

Crisis, the Joseph Rowntree Foundation, Citizens Advice and other organisations have joined the Resolution Foundation in calling for the housing allowance link to be restored. The chancellor will present his budget on 28 October.