## Rising Temporary Accommodation and the Call to Restore LHA Rates

A coalition of London councils, registered providers, and Newbridge Advisors has called on the UK government to restore Local Housing Allowance (LHA) rates, which have been frozen for the 2026/27 period. This freeze has contributed to a widening gap between LHA-supported rents and actual private rented sector (PRS) prices, exacerbating the shortage of affordable homes for low-income tenants.

According to Newbridge Advisors’ recent report, over 130,000 households in England currently live in temporary accommodation, with 84,000 of these including children. Councils spent more than £2.84 billion supporting temporary accommodation in the last year alone. The report highlights London’s acute crisis, where only 1% of rental homes are affordable under current LHA rates.

## Impact of LHA Freeze on the Private Rented Sector

The taskforce emphasises that the freeze on LHA rates since April 2023 has failed to keep pace with rising rents, limiting the supply of affordable PRS homes. Despite the introduction of the Renters’ Rights Act, which aims to provide tenants with greater stability, affordability remains a significant concern. The ban on bidding wars does not prevent landlords from setting high initial asking rents, maintaining a substantial affordability gap.

For landlords and letting agents, this situation means continued pressure on rental prices and potential difficulties in letting properties to tenants reliant on housing benefit. The mismatch between LHA rates and market rents may also influence rental negotiations and tenancy sustainability.

## Recommendations for Councils and Investors

The taskforce recommends that councils enhance their internal capabilities by developing appropriate skills and increasing capacity to source homes more diversely. They also stress the importance of providing ongoing support to residents to help maintain long-term tenancies.

Furthermore, the report calls for investors to collaborate with councils to create scalable solutions that increase the supply of social homes. Expanding social housing is seen as a critical long-term strategy to alleviate pressure on temporary accommodation and improve housing stability.

Janani Paramsothy, associate director at Newbridge and taskforce coordinator, stated:
“The rise in temporary accommodation, and the conditions in which families can be stuck for years, is one of, if not the, most pressing issues manifesting as part of the housing crisis. While the expansion in social homes is sorely needed to address this, we hope that this report has set out more immediate actions which all interested actors can take to tackle the problem more urgently.”

## Government’s Role and Private Sector Involvement

Tom Copley, Deputy Mayor of London for Housing and Residential Development, acknowledged the government’s efforts to address the crisis through the National Plan to End Homelessness, investment in social housing, and rental reforms. However, he emphasised the need for private sector involvement:
“We all need to play a part in this vast challenge. Central government is playing a major role in giving people stability and security over housing, not least through its National Plan to End Homelessness, investment in social housing and much-needed rental reforms. We need private sector partners to provide innovative solutions, effective data, and investment to promote both innovative short-term solutions and stable pathways out of homelessness.”

For landlords, this signals potential opportunities for collaboration with local authorities and investors to support sustainable housing solutions while navigating the evolving regulatory landscape.

## What This Means for UK Landlords and Letting Agents

The call to restore LHA rates underscores the ongoing affordability challenges within the private rented sector, particularly in London. Landlords should be aware that the current LHA freeze may continue to limit the pool of tenants reliant on housing benefit, potentially affecting demand for certain properties.

Letting agents may need to advise landlords on the implications of the affordability gap and consider strategies to support longer-term tenancies, including working closely with councils and housing support services. Additionally, increased social housing development and partnership opportunities with investors could influence the wider rental market dynamics in the coming years.

—

### Suggested internal link anchors

– Local Housing Allowance rates
– temporary accommodation crisis
– private rented sector affordability
– Renters’ Rights Act
– social housing expansion
– National Plan to End Homelessness
– rental reforms
– housing benefit tenants
– tenancy sustainability
– London rental market
– housing crisis solutions
– council housing support

—

### 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/