Freezes in housing support once again widen geographic disparities for low-income renters

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Freezes to local housing allowances reduce the disposable incomes of low-income private renters. LHA rates should be regularly and locally uprated.
Low-income households can receive support towards their housing costs through universal credit or housing benefit.

For social renters (i.e. those who rent from a council or housing association), these benefits can cover the full rent. For private renters, support is capped by ‘local housing allowance’ (LHA) rates, which vary based on the area a household lives in (called a ‘broad rental market area’ or BRMA) and the number of bedrooms the government considers them to need, known as the bedroom entitlement.

For properties with rents above the relevant cap, claimants can still receive support up to the value of the cap. Almost half of private renters are entitled to support for their rent through universal credit or housing benefit. For simplicity, we refer to both of these as housing benefit.

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The Institute for Fiscal Studies