New analysis by the National Residential Landlords Association (NRLA) challenges the case for maintaining the freeze on Local Housing Allowance rates, finding no clear link between benefit levels and rent increases in the private rented sector.
The findings arrive as ministers weigh whether to continue freezing LHA rates from April next year. Prime Minister Andy Burnham has argued that the housing benefit system is being "forced to chase rents in the private rented sector," with successive governments restricting LHA in an effort to limit welfare spending. The result, according to homelessness charity Crisis, is that fewer than 2% of private rented properties are now affordable for those receiving the benefit.
The NRLA's data covers more than 16 years of rental trends across two distinct periods. Between 2008/09 and 2015/16, when LHA rates rose in line with rents each year, average weekly rents increased by 2.5% a year. Between 2016/17 and 2024/25, when rates were frozen for all but two years, the average annual increase was 3.4%.
The association says the figures undermine the assumption that higher benefit levels translate into higher rents, with landlords pointing instead to tax policy, mortgage rates, tenant demand, and regulatory compliance costs as the primary drivers of pricing.
LHA was introduced in April 2008 to help claimants cover the cost of rents in the lowest 50% of any given area. That threshold was cut in April 2011 to the lowest 30% of rents. The previous government realigned rates with the bottom 30% in 2024/25 before deciding to freeze them again from April 2025, severing the link once more between benefit levels and current market rents.
The Institute for Fiscal Studies has estimated it would cost £1.5bn a year to uprate and maintain LHA at the bottom 30% of rents. That figure compares with the £2.8bn councils spent on temporary accommodation in 2024/25, a cost the NRLA argues could be substantially reduced by restoring the benefit. The IFS has also warned that a tight fiscal environment is "no excuse for a system that creates uncertainty for renters and unfairness between local areas."
Around a quarter of private renters currently receive housing support. Research by the Resolution Foundation found that restoring LHA to cover the lowest 30% of rents could lift 75,000 children and 125,000 adults out of poverty. Raising the threshold to the lowest 50% would lift 130,000 children and 215,000 adults out of poverty.
"Our analysis clearly shows that unfreezing housing benefit rates does not lead to an explosion in private sector rents," said Ben Beadle, chief executive of the National Residential Landlords Association.
"The reality is that rent levels are determined by a wide range of factors including tax and mortgage rates, demand from tenants and the costs of adhering to regulations.
"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.
"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."
