Government maintains freeze on Local Housing Allowance rates for 2026/27

The UK government has announced that Local Housing Allowance (LHA) rates will remain unchanged for the 2026/27 financial year, following a freeze in the previous year. This decision was confirmed during the Autumn Budget and affects households renting privately who rely on housing cost support through Housing Benefit or the housing element of Universal Credit.

According to government figures, nearly 1.7 million private rented households were receiving housing support as of August 2025. Of these, 53% face a shortfall between their housing benefit payments and their monthly rent, highlighting ongoing affordability challenges in the private rented sector.

Factors influencing the decision to freeze LHA rates

Minister for Work and Pensions Stephen Timms explained that the government considered multiple factors before deciding to maintain current LHA levels. The rates were last increased in April 2024 to the 30th percentile of local market rents, a move that cost £1.2 billion across Great Britain in 2024/25 and is projected to cost £7 billion over five years.

Mr Timms stated: “Local Housing Allowance (LHA) determines the maximum levels of housing support for households claiming Housing Benefit or the housing element of Universal Credit and who rent in the private rented sector. LHA is not intended to cover all rents in all areas.”

He added that the decision to keep rates steady in 2026/27 took into account rental levels across Great Britain, the challenging fiscal context, and the impact of current housing support levels. For renters experiencing a shortfall in rent costs, Discretionary Housing Payments remain available through local authorities as additional support.

Implications for landlords and tenants in the private rented sector

The freeze on LHA rates comes at a time when landlords and tenants are facing financial pressures. Ben Beadle, chief executive of the National Residential Landlords Association (NRLA), criticised the government’s approach, warning that the combination of frozen housing benefit rates and increased taxes on dividends, property, and savings income will ultimately harm renters.

He said: “It beggars belief that the government thinks it is helping renters. Piling on further tax rises that will drive up rents, whilst keeping housing benefit rates frozen, is a one-way street to hitting low-income tenants the hardest. This can only be described as a deeply regressive package that will make life more difficult for renters across the country.”

For landlords, this means continued challenges in balancing rental income with tenants’ ability to pay, particularly where housing benefit does not cover full rent amounts. Letting agents and property managers should be aware of the potential for increased rent arrears and the need to support tenants accessing Discretionary Housing Payments.

What landlords need to know

– LHA rates will remain at 2024/25 levels throughout 2026/27.
– Over half of tenants receiving housing support face a rent shortfall, which may affect rental income stability.
– Discretionary Housing Payments are available but are discretionary and vary by local authority.
– The fiscal environment and tax changes may put upward pressure on rents, despite the LHA freeze.

Landlords should monitor local rental markets and maintain clear communication with tenants who rely on housing benefit to manage potential affordability issues proactively.

Suggested internal link anchors

• Local Housing Allowance rates
• private rented sector
• housing benefit payments
• Discretionary Housing Payments
• rental affordability
• National Residential Landlords Association
• tax changes impact on landlords
• Autumn Budget housing policies
• housing support for tenants
• rental market trends

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/