TDS urges Government to unfreeze housing benefit ahead of the Autumn Budget

TDS has joined over 40 housing sector leaders in signing a letter that calls on the UK Government to unfreeze housing benefit for private renters.

The letter, also signed by Crisis, the NRLA and Propertymark, urges the Government to restore local housing allowance (LHA) rates to cover at least the cheapest 30% of rents.

LHA rates set a limit on how much support people receiving benefits get to pay their private rent. They have been frozen (stayed the same rate) periodically since 2016 – yet, at the same time private rents have risen significantly.

As a result, people on low incomes are facing substantial shortfalls between their housing benefit and private rent. This is forcing them to make difficult choices between paying rent or being able to pay for essentials like food and electricity bills.

TDS and our sector colleagues have real and pressing concerns that the ongoing LHA freeze is leaving people across the country unable to find or maintain an affordable home. This is leading to a surge in demand for homelessness services and an increase in the use of costly temporary accommodation.

New data from the TDS Charitable Foundation lays bare the effect of the housing benefit freeze on both tenants and landlords

According to the Voice of the Tenant survey funded by TDS Charitable Foundation:

• Over three quarters (76%) of private tenants in receipt of benefits experienced challenges when looking for a rental property

• A fifth (20%) said that landlords did not want to rent to tenants on benefits

• Worryingly, 61% of tenants receiving benefits regularly cut down on household essentials, including food and heating, in order to pay their rent  

In addition, the Voice of the Landlord survey reported that:

• A quarter of private landlords felt unable to rent to people receiving benefits, with the majority of these (71%) saying they seemed more financially precarious

• Nearly half (45%) of landlords pointed directly to the gap between the LHA rates and market rent as a reason why they felt unable to let to people receiving housing benefit 

Furthermore, there is a notable increase in the number of landlords in the housing benefit market who are selling properties.

In 2024, 20% of landlords in this market had sold one or more properties. By 2025, this has increased significantly to 37% of landlords who let to tenants receiving benefits selling one or more properties. That’s 17% more of these landlords selling off their properties in one year – in a market where there are already few affordable options.

Without restoring LHA rates, there is a real risk of further contraction of the supply of affordable private rented homes at LHA rate or below.

The growing gap between household benefit and rents across Britain

Crisis recently looked at the gap between housing benefit for private renters and the cheapest 30% of rents between 1st April 2024 and 31st March 2025.

It found that on average households across England are being forced to find an additional £429 a month for a three-bed home. That’s nearly the same amount that a typical family spends on gas, electricity and food each month, which is £434 on average.

Only 2.7% of private rented listings in Great Britain are affordable for people who receive housing benefit. This is down from 12% in 2021-22 and despite the fact LHA rates were increased in April 2024 by then Chancellor Jeremy Hunt. 

This means people who are already struggling are being pushed into arrears and sadly into homelessness. The Chancellor has the power to stop this at the Autumn Budget on 26 November – by restoring housing benefit so that it matches the true cost of rent.

Dr Jennifer Harris, Head of Policy, Research and Social Impact at the TDS Charitable Foundation said: “The private rented sector has a vital role to play in preventing and ending homelessness, but the LHA freeze is making it unviable for landlords to let to tenants receiving benefits. Restoring LHA to at least the 30th percentile of local rents is the most effective way to stop people from being forced into homelessness and give landlords the confidence to rent to tenants on low incomes.

The Chancellor must act now to halt the worrying trend of landlords selling up in the housing benefits market and keep affordable homes within reach.”