## Scottish Ministers Challenge UK Government on Local Housing Allowance Freeze

The Scottish Housing Secretary, Màiri McAllan, has formally written to UK Housing Secretary Steve Reed, urging the UK government to reconsider its decision to maintain the freeze on Local Housing Allowance (LHA) rates for the 2026/27 financial year. The freeze, announced during the Autumn Budget, marks the second consecutive year without an increase in LHA rates, which are intended to help low-income renters meet private sector rental costs.

Ms McAllan emphasises that the freeze is making it harder for lower-income households to access and sustain tenancies within the private rented sector (PRS). She highlights that in Scotland, 87 out of 90 LHA rates will fall below the 30th percentile of local market rents by the end of 2026/27. This shortfall could adversely affect around 45,000 households, including approximately 31,000 children.

## Implications for Renters and the Private Rented Sector

The ongoing freeze comes at a time of persistently high rents across the UK. According to Ms McAllan, UK-wide analysis by the Joseph Rowntree Foundation shows that around half of those receiving housing support are already living below the poverty line. This situation is particularly concerning for PRS tenants who rely heavily on housing support to maintain stable accommodation.

The Scottish Government argues that decisions made at UK level regarding LHA rates limit its ability to prevent homelessness and tackle child poverty effectively. Ms McAllan calls for LHA rates to be permanently set at least at the 30th percentile of local rents to provide adequate support for tenants.

## Industry Response: Calls for Higher LHA Rates

Propertymark, a leading industry body, has also criticised the freeze, warning it will exacerbate the housing affordability crisis. Timothy Douglas, head of policy and campaigns at Propertymark, stresses that the longer the UK government maintains the freeze, the wider the gap becomes between housing support and actual rental costs.

Douglas advocates for LHA rates to reflect real market rents, suggesting they should meet at least the 30th percentile, if not the 50th percentile, of local rents. He warns that the freeze will push more renters into financial hardship, increasing the risk of homelessness and placing additional pressure on local services already stretched by rising rents and regulatory costs.

## Impact on Local Authorities and Temporary Accommodation Funding

Ms McAllan also raised concerns about the subsidy arrangements for temporary accommodation provided by councils. Currently, councils receive a subsidy equivalent to 90% of the 2011 LHA rate, a figure that has remained unchanged for nearly 15 years despite significant increases in the cost of providing temporary accommodation.

She describes this subsidy system as placing an unfair burden on local authorities and calls for an urgent review to ensure funding reflects the true costs faced by councils in delivering temporary housing support.

## What This Means for UK Landlords and Letting Agents

For landlords and letting agents operating in Scotland and across the UK, the freeze on LHA rates signals ongoing challenges for tenants reliant on housing benefit to afford market rents. As affordability pressures mount, landlords may face increased risk of rent arrears or tenancy instability among tenants dependent on LHA support.

The calls from Scottish ministers and industry bodies for LHA rates to better reflect local market rents highlight the importance of monitoring government policy changes closely. Adjustments to LHA rates can influence tenant demand, rental income stability, and the overall health of the private rented sector.

Suggested internal link anchors
– Local Housing Allowance rates
– Private rented sector challenges
– Housing benefit subsidy
– Temporary accommodation funding
– Rent affordability crisis
– Homelessness prevention
– Child poverty and housing
– UK housing policy updates
– Landlord financial pressures
– Tenant support and housing benefit

TLA update

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