Freezing Local Housing Allowance (LHA) rates has not prevented private sector rents from increasing at a faster pace, according to an analysis by the National Residential Landlords Association (NRLA).
The NRLA found that average weekly rents rose by 2.5% annually between 2008/09 and 2015/16, a period when LHA rates were adjusted in line with rents each year. In contrast, between 2016/17 and 2024/25, when the allowance was frozen for all but two years, the average annual increase in rents was 3.4%.
Ben Beadle, chief executive of the NRLA, stated that their analysis indicates unfreezing housing benefit rates does not lead to a surge in private sector rents. He added that rent levels are influenced by various factors, including tax and mortgage rates, tenant demand, and regulatory costs.
The findings emerge as ministers consider whether LHA rates should remain frozen from April next year. The Institute for Fiscal Studies estimates that maintaining LHA at the bottom 30% of rents would cost £1.5 billion annually.