Resolution Foundation Urges LHA Rent Support Increase in Budget

The Resolution Foundation warned that more than 1.1 million low-income families in rented homes face a housing cost crisis unless Chancellor John Healey adjusts the Local Housing Allowance (LHA) in the October 28 budget. The LHA has been frozen in cash terms since autumn 2024, causing a widening gap between government support and actual market rents.

According to the thinktank, families in typical two-bedroom flats now face an average weekly shortfall of £158, with some London residents seeing gaps exceeding £300. To resolve this, the Resolution Foundation proposes restoring the automatic annual link between LHA and local rents. This measure would cost an estimated £2bn per year by 2029-30, which the group suggests could be funded by increasing the Universal Credit taper rate.

Charities including Crisis and Citizens Advice support the proposal. A spokesperson for the Government of the United Kingdom responded that LHA rates are reviewed annually and that future decisions will be based on the fiscal context and welfare priorities.