‘Cost of housing’ crunch looms for low-income families, warns Resolution Foundation

The average shortfall betwen LHA payment and actual rent can be as high as £300 a week in parts of London. Photograph: David Burton/Alamy View image in fullscreen The average shortfall betwen LHA payment and actual rent can be as high as £300 a week in parts of London. Photograph: David Burton/Alamy ‘Cost of housing’ crunch looms for low-income families, warns Resolution Foundation Thinktank calls on chancellor to end housing allowance freeze with typical two-bedroom household facing £158 week shortfall amid rent rises More than 1.1 million low-income families in rented homes face a “cost of housing” crunch without action from John Healey in next month’s budget, the Resolution Foundation thinktank has warned. Local housing allowance (LHA) has been frozen in cash terms since autumn 2024. In a new report, Saving Private Renters, the thinktank found that rising rents since then have led to a widening gap between what families claiming LHA can afford, and the realities of the market. Thinktank calls for ‘double lock’ England private rent cap to ease living costs It said a low-income family renting a typical two-bedroom flat now faces an average shortfall of £158 a week. That rises to more than £300 a week in parts of London. The Resolution Foundation rejects the suggestion that relinking LHA with local conditions would mainly benefit private landlords, . , it finds that 90p of every £1 tends to fall to tenants, instead of feeding through into price changes. The Resolution Foundation suggests funding that change “taper rate” at which universal credit (UC) is withdrawn as recipients’ income rises. The report argues this would involve a transfer within the UC system, towards claimants with the most need. The thinktank pointed to survey evidence suggesting one in five working-age adults in families on housing support in private rental accommodation were unable to afford to keep their homes warm, and one in eight were unable to afford three meals a day. skip past promotion after promotion When LHA was first introduced in 2008 it was pegged to the median level of local rents, and in 2011 that was reduced to the 30th percentile. It has been frozen for nine of the past 14 years. A chorus of charities and campaigners have called for the restoration of the link, including Crisis, the Joseph Rowntree Foundation and Citizens Advice. The chancellor will present his budget on 28 October. He is under pressure to fulfil Labour’s promise of giving voters a “breathing space” amid rising costs, but likely to be constrained .