A recent study has revealed that a mere 2.5% of private rented homes in England are affordable for individuals relying on housing benefit. This shocking number highlights a worsening trend in the rental market, where skyrocketing rents have increasingly outstripped federal assistance. The results come as LHA rates are set to remain capped until 2026. This freeze only exacerbates the challenges low-income families are already experiencing.
Housing benefit is only supposed to cover the bottom third of rents in the private sector. The typical rent for a new let in England has increased by an astonishing £1,381 over the 12 months to February 2025. Consequently, a record number of families are being priced out of the housing market. This freeze on LHA rates will impact about 5.7 million households who rely on this important form of financial assistance.
The picture is made worse by the record-high use of temporary accommodation in England. As it stands now, 126,040 households are camping in temporary quarters, over 164,000 children are living in emergency shelters, and national emergency still exists. The cost to local authorities is estimated at £2.3 billion a year for temporary accommodation alone for homeless families in the 2023-24 fiscal year.
Matt Downie, chief executive of Crisis, one of the country’s largest charities, said he was alarmed. Today’s freeze on housing benefit will be confirmed in causing a further increase in homelessness,” he said. This perfect storm risks drowning local leaders altogether. As it stands, they are unable to keep pace with demand for support—which will leave even more families languishing in unsuitable temporary accommodation that damages their health and wellbeing.
The government has acknowledged the severity of the housing crisis, with a spokesperson stating, “We have inherited the worst housing crisis in living memory with rent levels unaffordable for far too many.” The government has promised this will be a huge £2 billion investment. The program will build or acquire/convert up to 18,000 new social and affordable homes. On top of that, they’re pledging to develop 1.5 million new homes to address affordability in the rental market.
Renters will finally have the ability to fight against astronomical rent hikes. This is intended to achieve real relief in a locality where median rents have increased by an astounding 45% in the past 10 years.
Chief Executive Matt Downie then highlighted the weaknesses in our current housing support package. He continued, “Housing benefit should be enough to cover the bottom third of rents in the private sector, but we’re not even close to that at the moment. This gap puts millions of families in constant threat of eviction without a stable place to call home.
Without affordable housing options available, low-income families are left without a safety net during times of uncertainty. In the meantime, frozen benefit rates only serve to entrench their insecurity. Too many families have to relocate on a regular basis. They frequently fall back on short-term rentals, which come with their own set of challenges. Paul McDonald, chief campaigns officer at Health Equals, emphasized the detrimental health impacts of such instability: “When people are forced to move house, sofa surf, live in temporary accommodation or cold, mouldy and overcrowded conditions, their health and wellbeing suffers.”