The Resolution Foundation has issued a stark warning that over 1.1 million low-income families in rented homes are facing a significant “cost of housing” crunch. With the Local Housing Allowance (LHA) frozen since autumn 2024, many families are now grappling with an average shortfall of £158 per week for a typical two-bedroom flat, a situation exacerbated by rising rents across the UK.
The thinktank argues that without intervention from the Chancellor in the upcoming budget, the gap between what families can afford and actual rental prices will reach unprecedented levels. In London, this shortfall can exceed £300 weekly, pushing families into difficult choices between paying rent and affording basic necessities like food and heating.
The report highlights that restoring the link between LHA and local rent levels could cost around £2 billion annually, but it suggests that this could be funded by adjusting the taper rate for Universal Credit. This would allow more support to flow to those most in need, rather than benefiting landlords.
As the Chancellor prepares to present his budget on 28 October, the pressure mounts to address these issues. Failure to act could lock families into a cycle of financial strain, with the potential for the LHA gap to widen to 30% by March 2028, further jeopardising the stability of low-income households across the country.
Source: The Guardian
