Private landlords call on government to unfreeze housing benefit as number of families in temporary accommodation soars

The National Residential Landlords Association (NRLA) has said that unfreezing housing benefits will not lead to major private rent increases as the number of households in temporary accommodation (TA) has reached a record high.

While ministers are considering whether to continue freezing local housing allowance (LHA) rates from April next year, new research by the private landlord membership body showed there is no clear link between increasing benefit levels and “an explosion” in private sector rents.

The LHA was introduced in April 2008 with the aim of supporting claimants to cover the cost of the lowest 50% of rents in any given area. In April 2011 it was cut to cover the lowest 30% of rents.

Between 2016/17 and 2024/25, the LHA rate was frozen for all but two years, while average weekly rent increased by 3.4% annually. This means that the level of funding available did not align with rising rental costs.

As a result of the freeze, homelessness charity Crisis suggested that fewer than 2% of private rented properties are affordable for those in receipt of the benefit.

According to the government’s latest homelessness statistics, there were 135,580 households in TA on 31 March 2026. This represents an increase of 1.1% compared to the previous quarter.

Of these, 86,460 were families with children, up 0.8% from last quarter and 5.2% from the same time last year.

However, the number of children living in bed and breakfasts for longer than the statutory six-week limit has been decreasing each quarter since the peak on 30 June 2024.

The Institute for Fiscal Studies has estimated that it would cost £1.5 billion a year to uprate and maintain the LHA rate to cover the bottom 30% of rents. This represents just over half the £2.8 billion spent by councils on TA in 2024/25.

According to the Resolution Foundation, restoring housing allowance rates to cover at least the lowest 30% of rents could lift 75,000 children and 125,000 adults out of poverty. Increasing it to cover the lowest 50% of rents would lift 130,000 children and 215,000 adults out of poverty.

Stephanie Morphew, policy lead on homelessness at the Chartered Institute of Housing, said: “Long term, creating more secure and affordable tenancies by increasing the amount of new social rented homes is the answer to the homelessness crisis.

“Right now, the most effective way to combat this is to ensure that social security payments cover private rents by restoring local housing allowance rates so that at least the bottom 30% of rents in an area are covered. The Autumn Budget must turn ambition into lasting change.”