‘Cost of housing’ crunch looms for low-income families, warns Resolution Foundation
Thinktank calls on chancellor to end housing allowance freeze with typical two-bedroom household facing £158 week shortfall amid rent rises More than 1.1 million low-income familie
By The Guardian
Low-income families in rented homes could face a growing housing shortfall unless the government acts in next month’s Budget, the Resolution Foundation has warned.
The thinktank said more than 1.1 million low-income households are affected, with Local Housing Allowance frozen in cash terms since autumn 2024.
Resolution Foundation economist Stephen Hunsaker said the gap between average rents and Local Housing Allowance is set to reach a record high this October. He warned that failing to relink the allowance to actual rents could leave the freeze in place for another year and push the gap to 30% by March 2028.
The foundation said households already relying on housing support are going without essentials to meet rent costs. It called on the government to restore the automatic annual link between the allowance and rents.
A government spokesperson said Local Housing Allowance rates are reviewed annually and future decisions will depend on the government’s welfare priorities and fiscal position.