The government has confirmed it will continue to review Local Housing Allowance (LHA) rates, despite freezing them for the second consecutive year. This decision is significant for landlords as it affects the level of housing benefit support available to private renters, potentially impacting rental income and tenant affordability.

Background on LHA and Its Importance for Landlords

Local Housing Allowance rates determine the maximum housing benefit that tenants in the private rented sector can claim towards their rent. Since April, LHA rates have been frozen, meaning they have not increased in line with rising rental prices. For landlords, this freeze can lead to a growing gap between the rent charged and the amount tenants receive in housing benefit, which may affect tenants’ ability to pay rent on time and in full.

According to government data from August this year, nearly 1.7 million households in the private rented sector receive housing cost support. Of these, 53% face a shortfall between their housing benefit payments and their monthly rent. This shortfall can increase the risk of rent arrears and tenancy instability, issues that landlords need to monitor closely.

Government Response to Concerns About Affordability and Homelessness

Labour MP Jim McMahon recently asked the government to assess homelessness levels in relation to rented accommodation affordability and LHA rates. In response, Homelessness Minister Alison McGovern acknowledged that a lack of affordable housing is a key driver of homelessness. She highlighted the government’s commitment to delivering a decade of renewal for social and affordable housing, supported by £39 billion funding for the Social and Affordable Homes Programme.

Ms McGovern stated: “We recognise some private renters need support with their rent. That is why we will work across government to keep Local Housing Allowance rates under review in order to deliver on the government’s priorities, including maintaining the long-term fiscal sustainability of the welfare system.”

Implications for Landlords and the Private Rented Sector

For landlords, the ongoing review of LHA rates offers some reassurance that the government is aware of the challenges faced by tenants reliant on housing benefit. However, the freeze means that, for now, rental support has not increased to match market rents, which may continue to place pressure on tenants and landlords alike.

Landlords should be aware that a significant proportion of tenants receiving housing benefit may struggle with affordability, potentially leading to increased rent arrears or tenancy turnover. It is advisable for landlords and letting agents to maintain open communication with tenants about any financial difficulties and to consider flexible arrangements where appropriate.

Additionally, the government’s broader homelessness strategy, which aims to halve long-term rough sleeping, end the unlawful use of bed and breakfasts for families, and prevent homelessness, may influence housing demand and policy in the coming years. Landlords should stay informed about these developments as they could affect the private rented sector.

Looking Ahead: Support for Landlords and Tenants

In light of these ongoing challenges, the Tenancy Lawyers Association (TLA) is launching a new Trusted Partners Hub in Q1 2026. This platform will feature verified and approved service providers selected to support landlords, tenants, and property management businesses. Service providers in legal, trades, insurance, financial, mortgage, tenant screening, and other relevant sectors are invited to register their interest to join the hub.

This initiative aims to provide landlords with reliable resources and professional support to manage tenancies effectively, particularly in a market where housing benefit rates and affordability remain key concerns.