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Hundreds of thousands more people to be pushed into poverty by Labour’s freeze on housing benefit
Charities warn that keeping the freeze on housing benefit at the Budget could push nearly 200,000 families into poverty or deeper poverty and undermine Prime Minister Andy Burnham’s pledge to end rough sleeping. They say housing support is falling behind rising rents, leaving some renters unable to afford their homes and increasing the risk of homelessness.
Local Housing Allowance, which is intended to cover at least the cheapest 30 per cent of local rents, has been frozen since April 2024. By October, it fell 23.3 per cent short of affordable rents, equivalent to about £200 a month in London and £100 elsewhere. Joseph Rowntree Foundation research suggests that by 2029 private renters could be £700 worse off annually, with 50,000 entering poverty, 60,000 deep poverty and 80,000 very deep poverty; 19 organisations are calling for £1.7bn to end the freeze and for an inflation-linked rent cap.
In short
- Charities say the housing benefit freeze could deepen poverty for nearly 200,000 families.
- Local Housing Allowance is 23.3 per cent below affordable rents.
- The groups want £1.7bn in funding and an inflation-linked rent cap.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Charities argue that housing support should keep pace with rents so low-income renters can afford secure homes and avoid poverty or homelessness. Restoring Local Housing Allowance to its intended level, with an inflation-linked rent cap, could protect families and support the Government’s pledge to end rough sleeping.
The case against
A Government defending the freeze could argue that public funds are limited and that raising housing benefit would carry a substantial, recurring cost, so support must be weighed against other priorities and the need to manage spending. It might also favour targeted help or wider action on housing supply and rents, while assessing whether higher allowances would reliably reduce poverty and homelessness.
Explained simply
Local Housing Allowance is the part of housing benefit used to help people on low incomes pay rent in privately rented homes. It is meant to cover at least the cheapest 30 per cent of rents in each area, but its rates have been frozen since April 2024 while rents have continued to rise.
The gap between support and rent can leave tenants struggling to pay for their homes and at greater risk of homelessness. Charities say this also makes the Government’s pledge to end rough sleeping harder to achieve; the allowance’s level is one of the issues they want addressed.