13 Oct 2025
CIH among 40-strong coalition urging government to unfreeze local housing allowance
The Chartered Institute of Housing (CIH), along with 39 other organisations, has urged the UK government to lift the freeze on housing benefit for private renters in order to tackle homelessness and ease mounting pressure on local councils.
In a joint letter, the coalition — which includes groups representing both tenants and landlords — calls on ministers to restore local housing allowance (LHA) rates so that they once again cover at least the lowest 30 per cent of rents.
Research from the Resolution Foundation suggests this move could pull 75,000 children and 125,000 adults out of poverty across the UK.
LHA rates determine the maximum amount of housing benefit available to people renting privately. These rates are designed to cover the cheapest 30 per cent of rents in a given area but have been repeatedly frozen since 2016.
Because of this freeze, many low-income households face significant gaps between their housing benefit and their rent, forcing them into difficult choices about whether to pay their landlord or cover essentials such as food and energy bills.
The failure to keep LHA aligned with rising rents is contributing to the growing homelessness crisis. Government figures show that 170,000 children in England are now living in temporary accommodation.
Much of this accommodation is of poor quality, with residents reporting problems such as mould, damp, and overcrowding. The rising demand is also putting council budgets under severe strain, with local authorities in England spending over £2.7 billion on temporary housing last year alone — a 26 per cent increase compared with 2023–24.
The Local Government Association has also warned that the freeze on LHA rates has cost English councils more than £700 million in irrecoverable expenses over the last five years, while devolved governments in Scotland and Wales face similar financial challenges.
‘Breaking point’
CIH chief executive Gavin Smart said: “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 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.”
Matt Downie, chief executive at Crisis, said: “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 per cent 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.”
Ben Beadle, chief executive of the National Residential Landlords Association, said: “Housing benefit must reflect the reality of today’s rental market. Right now, tenants on the lowest incomes are being locked out of the sector altogether because the support they receive simply doesn’t match up to actual rents.
“The chancellor has an opportunity this autumn to put things right. Unfreezing LHA and ensuring it covers at least the bottom 30 per cent of local market rents would make an immediate and meaningful difference.”
Florence Eshalomi, chair of the HCLG committee, said: “It’s shameful that so many families are without a home. Almost 170,000 children are without a permanent roof over their heads with families forced to live in B&Bs, bedsits and hotels that are completely unsuitable for their needs.
“Our committee heard compelling evidence that the decision to re-freeze LHA rates will leave families unable to afford private sector rents and places them at risk of homelessness. This is a false economy that increases temporary accommodation costs for councils and undermines the additional funding for homelessness services.
“At the budget, the chancellor should look again at LHA and carefully consider the impact that freezing LHA is having on our homelessness services and families struggling to make ends meet.”
