AGENTHousing
← Latest editionRents outrun housing support as Budget deadline looms
A typical two-bedroom private renter now faces a £158 monthly gap between rent and the state support available.
- Local Housing Allowance is approaching a record 23% below lower-end private rents, according to new Resolution Foundation analysis.1
- A typical two-bedroom renter in England faces a £158 monthly shortfall between their rent and the maximum support available.1
- The government has frozen LHA at current cash levels for 2026–27, despite rents continuing to rise.2
- Ministers have confirmed the Autumn Budget will take place on 28 October, but have not announced a plan to relink LHA to rents.3
- The Resolution Foundation says relinking support would cost £2bn a year by 2029–30 — not the £6bn advocacy estimate reported elsewhere, and not a government commitment.14
The gap is no longer confined to London. In more than half of England’s rental-market areas, the shortfall for a two-bedroom home exceeds £100 a month. In Inner East London, it reaches £324.1
The government’s current policy leaves households to cover the difference from wages, other benefits or essentials. Resolution Foundation analysis found that 58% of working-age adults in private-renting families receiving housing support were materially deprived in 2024–25. One in five could not afford to keep their home warm.1
The foundation’s evidence also challenges the argument that increasing LHA mainly enriches landlords. Its analysis of the 2024 increase found that only about 10p of every extra pound appeared to feed through into higher rents, while the number of Universal Credit households whose rent exceeded their allowance fell by 154,000 in England over the following year.1
The immediate decision now sits with ministers ahead of the 28 October Budget. The government has said it considered rental levels, the fiscal position and the effect of existing support when it froze LHA for 2026–27.2 It has not publicly committed to restoring the link to the 30th percentile of local rents — or to uprating the allowance automatically each year.