England housing benefit gap nears record levels

More than 1.1 million low-income families in England are facing a widening gap between local rents and available housing benefit support. According to research from the Resolution Foundation, the shortfall between typical rents at the 30th percentile of local markets and Local Housing Allowance (LHA) rates is projected to reach 23.3% in October 2024, approaching record levels.

Regional disparities are significant. Families renting a two-bedroom property in inner East London face a typical monthly shortfall of £324, while gaps of at least £200 are reported across the rest of the capital. In more than half of all areas in England, the shortfall exceeds £100. Because LHA rates have remained frozen since April 2024, the think tank warns the gap could reach 30% by March 2028 if the government does not relink rates to local rents in the upcoming Budget.

The report also addresses concerns that increasing LHA rates primarily benefits landlords. Analysis of the April 2024 uplift found that only 10p in every pound of additional support translated into higher rents at the bottom of the market, suggesting that the majority of the support reaches the tenants.