In a major announcement for 2025, the Department for Work and Pensions (DWP) has confirmed that while most working-age benefits will increase by 1.7% to match inflation, Local Housing Allowance (LHA) rates will remain frozen at their 2024 levels.
This decision is likely to affect thousands of renters across the UK who rely on housing benefits to help cover the cost of rent in private accommodations.
Why the Freeze Matters
The Local Housing Allowance sets the maximum amount of housing benefit that private renters can receive. However, as rents continue to rise in many areas, the frozen rates mean that housing benefits will no longer align with actual rental costs.
For example, experts predict that private renters on housing benefits could face an average shortfall of £700 a year. Families with children are expected to feel the pinch even more, with estimates suggesting they could be almost £900 worse off annually.
The Bigger Picture
The freeze on LHA rates comes at a time when the UK is already grappling with a housing crisis. Rising rents, coupled with a shortage of affordable homes, have left many renters struggling to make ends meet.
Charities like Shelter and the Joseph Rowntree Foundation have warned that this policy could push more households into poverty. The financial gap between benefits and real rent costs increases the risk of rent arrears and homelessness, putting additional strain on local councils and social services.
What the Government Says
While the government has raised most benefits by 1.7% in line with inflation, officials argue that keeping LHA rates static helps control public spending. However, critics highlight that this approach ignores the realities of a rapidly changing rental market and the financial pressures on low-income households.
What You Can Do If You’re Affected
If you’re worried about how this will impact you, there are options to explore:
- Discretionary Housing Payments (DHP): Local councils may offer extra payments to help with rent shortfalls. Contact your council to find out if you qualify.
- Local Welfare Assistance Schemes: These schemes provide emergency financial support, which could include help with housing costs.
- Household Support Fund (HSF): This fund is designed to help vulnerable households with essential expenses. Check with your local council for details on how to apply.
Renters are urged to reach out to their local authorities to ensure they are receiving all the support they’re entitled to. It’s also worth reviewing your current rent agreement and exploring options to negotiate or seek advice if you’re struggling.
As the housing crisis deepens, the LHA freeze for 2025 serves as a stark reminder of the challenges faced by renters in an ever-tougher market.
