Does Anybody Care? How the Housing Benefit Freeze Deepens Poverty

In recent years, the UK's housing crisis has taken on more than a troubling turn, with policy decisions exacerbating the struggles of low-income renters. A critical factor in this escalating issue is the government's decision to freeze the Local Housing Allowance (LHA) rates, a move that has far-reaching and devastating consequences.

The LHA is designed to help cover housing costs for those renting privately. However, since 2011, adjustments to LHA rates have not kept pace with the soaring rental market. Research indicates that, on average, private renters receiving housing benefits will be £684 worse off annually by April 2025 due to these policy changes. This shortfall equates to more than a month's rent each year, placing an immense financial burden on already struggling households.

Impact on Families and Children

The freeze doesn't just affect individual renters; it has a profound impact on families, particularly children. Nearly one million children are now living in households where housing benefits fail to cover the rent, pushing these families closer to poverty.

The housing benefit freeze is more than a policy oversight; it's a catalyst for deepening poverty and social inequality.

The consequences of the LHA freeze extend beyond individual hardships. Homelessness applications have increased by 1% in a six-month period, with figures rising from 1 April to 30 September 2024.

Shortfall in housing support relative to rent among private renters in bottom 40% of income distribution 2023-24

A Call for Policy Reform

The current situation is unsustainable and calls for immediate policy intervention. Re-linking housing benefits to actual rent levels is a necessary step to prevent further financial hardship among low-income renters. Without such measures, the cycle of poverty and homelessness will continue to spiral, affecting not just those directly involved but society as a whole.

The simplest solution is to unfreeze housing benefits so they reflect actual rent prices. So the problem isn't left to charities and grassroots projects such as ours to manage—sticking plasters over a system that needs structural change. We’ll keep showing up, because that’s what we do. But real change has to come from the top. Until then, the number of people caught in this crisis will keep growing.