The Resolution Foundation has urged the chancellor to end a freeze on local housing allowance (LHA), warning that more than 1.1 million low-income families in rented accommodation face a worsening 'cost of housing' crisis if action is not taken in next month’s budget.
The thinktank said LHA has been frozen in cash terms since autumn 2024 while rents have continued to climb, leaving many households struggling to cover housing costs. It highlighted that a typical two-bedroom household now faces a shortfall of around £158 a week between benefit support and current market rents.
Calling on John Healey to act, the Resolution Foundation described the situation as liable to push vulnerable families into deeper financial pressure unless the freeze is lifted. The organisation framed the change as a targeted measure to align housing support with prevailing rent levels and ease immediate cost pressures for low-income renters.
The warning comes ahead of the government's next budget, with the thinktank pressing for a policy reversal to prevent what it described as an imminent crunch for renters on low incomes. The foundation's analysis adds to wider debate over social security settings and the cost pressures facing households in the private rented sector.