Local Housing Allowance: Freeze

Wednesday 4th November 2026 Lords Chamber

Question

11:16

Asked by

[Baroness Lister of Burtersett]

To ask His Majesty’s Government what consideration they have given to lifting the freeze in local housing allowance; and what assessment they have made of the effect of lifting that freeze on homelessness and the demand for temporary accommodation.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, this Government are spending tens of billions of pounds on housing support each year. We are also investing over £40 billion over 10 years in the social and affordable homes programme. We know the causes of homelessness are complex, both personally and structurally. My department is working with MHCLG on the national plan to end homelessness. The Government’s investment in homelessness and rough sleeping services is now over £4 billion over the next three years, building on the actions set out in that strategy.

[Baroness Lister of Burtersett (Lab)]

My Lords, poverty and housing charities and the LGA are very disappointed that the local housing allowance freeze, made under austerity, was not lifted in the Budget, despite the Government’s welcome commitment to tackling homelessness and child poverty. The shortfall for low-income private renters has reached an all-time high, with consequences for poverty, destitution and homelessness, and the need for temporary accommodation and food banks. The Prime Minister himself told the Commons recently:

“The freeze does not save money, because it just creates an unfunded pressure in council budgets”.—[Official Report, Commons, 1/9/26; col. 63.]


Will the Government therefore now consider classifying the LHA as preventive spending, with a view to restoring its original annual uprating from April?

[Baroness Sherlock (Lab)]

My Lords, the starting point is that my department spends £38 billion a year on housing support. No other OECD country spends a greater proportion of its GDP on housing help. Around one-third of households in the private rented sector now get housing support from DWP. That costs over £13 billion a year; it went up by over £3.5 billion in the last decade and keeps rising. In the end, we have to address the root cause of this issue, and the only way to do that is to secure an adequate number of decent affordable homes. That is why the Government have recently announced an extra £1.5 billion to deliver around 10,000 homes in England, prioritising social rent, especially council homes, and we will keep building up the resources to do that. Discretionary support for housing costs is available from local authorities for those receiving housing support who have a shortfall in meeting their housing costs.

[Baroness Teather (LD)]

My Lords, LHA levels have now fallen so far behind market rent levels that fewer than 2% of properties are affordable, leaving hundreds of thousands of families stuck—stuck on social housing waiting lists with no chance of housing; stuck in temporary accommodation, unable to move on; and stuck while other homeless families wait for that space to be freed for them. Can the Minister not see that solving the homelessness crisis requires us first to unstick LHA levels?

[Baroness Sherlock (Lab)]

My Lords, the starting point is that it needs to be the other way around. The noble Baroness mentions 2%; she will know that that is not a figure the Government recognise, but we do recognise the affordability pressures faced by those living in the private rented sector. That is why we have taken a whole series of actions: the Renters’ Rights Act in May, powers to challenge excessive rent hikes, giving greater security through the abolition of no-fault Section 21 evictions, and taking practical steps through that Act to help renters tackling rental discrimination. In the end, the only way to drive down rents in the sector is for there to be enough supply of housing, which is why the Government have prioritised that. We are also investing significantly in supporting councils, in addressing problems in temporary accommodation and, crucially, in addressing the root causes of homelessness. That must be the priority.

[Lord Young of Cookham (Con)]

To build on the question from the noble Baroness, Lady Lister, the Government want to move asylum seekers out of hotels and into private rented accommodation, and to end rough sleeping, which means providing move-on accommodation for rough sleepers when they leave hostels. Both these groups are, by definition, on low incomes. How confident is the noble Baroness that those two worthy ambitions will be met if the local housing allowances do not cover local rents?

[Baroness Sherlock (Lab)]

My Lords, the noble Lord raises important points, and there are different groups of people who need housing support, but they all need to be tackled in different ways. I will not go into detail about what has happened with asylum accommodation, but we know that a lot of work has gone into that. Crucially, the investment of significant amounts of extra money—another £432 million to address homelessness and rough sleeping, bringing that to over £4 billion in three years—is addressing a whole range of questions. These include trying to get people off the streets, but then supporting them to move on and operate independently, addressing whatever the underlying issues are, such as mental health, elsewhere. We are also taking action in different areas. We are working to tackle the inappropriate and illegal use of B&B accommodation for families over a certain area. We have committed £30 million in support of a three-year emergency accommodation reduction programme, specifically to support local authorities with the highest pressures. The Government are acting in all the different areas, but in the end, the solution has to be more housing.

[The Lord Bishop of Leicester]

My Lords, councils spent £2.8 billion on temporary accommodation last year, while it is estimated that restoring the local housing allowance would cost around £2 billion a year by the end of the decade. Did the Government weigh the cost of the freeze to councils against its savings to DWP?

[Baroness Sherlock (Lab)]

My Lords, the Government weighed all the issues involved in housing across the piece. As I was saying to the noble Lord, Lord Young, we have a housing market, and all these things are interrelated. It is not a matter of simply pressing down here and comparing it with what happens over there. In the longer term, if we do not have enough decent affordable homes, rents will keep rising. It is a simple law of supply and demand. The Government have to meet the challenge of addressing prices in the short term, which is why we have been doing lots on temporary accommodation; addressing prices in the long term by investing over £40 billion over 10 years in the long-term development of additional housing; and investing in the immediate term with discretionary support so that, where there is rent shortfall, renters can apply for help from local authorities. We have also put the first part of a multi-year settlement into local resilience support. So we are doing it across the piece but, in the end, we have to get the market sorted.

[Lord Best (CB)]

My Lords, does the Minister accept that very few landlords are going to let to anyone on housing benefit if they know there is a gap to be filled between the rent the tenant receives as benefit and the actual rent that has to be paid? No landlord is going to take the risk with such tenants, and this is already leading to a drying up of accommodation provided by private landlords for anyone on the lowest incomes.

[Baroness Sherlock (Lab)]

My Lords, there is certainly a relationship—at least, we assume so—between the amount of money the state will spend supporting housing and how much landlords charge. That cashes out in various ways, as I have just been trying to describe. The reality is that a significant number of people in the private rented sector who receive housing support, either housing benefit or universal credit, apply and get help from their councils through discretionary housing payments and the wider crisis and resilience fund. It will carry on being there to support them, and they can use that to help to pay their rents.

[Baroness Warwick of Undercliffe (Lab)]

My Lords, bearing in mind what the Minister has said about the Government’s priorities, what assessment has she made of the short-term case for restoring local housing allowance to the 30th percentile, in order to make the private rented sector more accessible while the country builds the social homes we know are needed to meet sustainable long-term housing need?

[Baroness Sherlock (Lab)]

We will continue to keep the rate of the local housing allowance under review. To give the House a sense of the cost involved, in April 2024 there was a one-year increase in the local housing allowance; that cost an extra £1.2 billion in 2024–25. Over five years, that one rise will cost over £7 billion. I am extremely sensitive to the points being raised. The Government are investing money through a long-term crisis and resilience fund and through local discretionary support to help meet the shortfalls. But in the end, the Government’s priority is to tackle emergency problems in the short term, tackle emergency accommodation, tackle temporary accommodation, invest extensively in tackling homelessness, and provide extra support while the market is sorted.

[Baroness Stedman-Scott (Con)]

My Lords, if increasing supply is the sustainable way to make housing more affordable, do the Government accept the OBR’s forecast that 190,000 fewer additional homes will be delivered over the forecast period, which will mean higher housing costs as a direct result of this Government’s failed housing policy?

[Baroness Sherlock (Lab)]

My Lords, I am not sure that, if I were on the Benches opposite, I would be talking too much about a failure to build houses over a long period. Since we are on the subject, this Government are providing an extra £1.5 billion to provide 10,000 homes in England for social rent now. We also have a target to build 1.5 million new homes—we know that that is stretching. Our latest statistics suggest that we built 437,900 net additional homes from the start of this Parliament through to 20 September this year. It will take time for the impact of our planning reforms to flow through to the published data, and we know this is a difficult environment; the geopolitical context is not easy. We know it will be challenging and that it will take time to turn the tide and deliver more homes. We expect housebuilding to ramp up further in the later years of this Parliament, but I urge the whole House to get behind an ambitious target. We need Government after Government to keep doing this. This Government are determined to do it.

[Baroness Nargund (Lab)]

My Lords, homelessness and temporary accommodation are not just housing issues; they are public health issues. Housing is an important determinant of health. The report published by our Government in December 2025 showed that during the last Government, from 2019 to 2024, temporary accommodation was a contributing factor to the deaths of 74 children, and 58 of those children were under the age of one. Will the Government consider the public health consequences of homelessness and temporary accommodation, and work jointly with the Department of Health and Social Care and the NHS when planning these prevention strategies?

[Baroness Sherlock (Lab)]

My noble friend raises an excellent point. It is not just a matter of temporary housing; there are issues about the quality of housing. The Government are working very hard on this. In particular, we take the issue of non-compliant landlords renting out substandard properties very seriously indeed. Local authorities have various powers to make sure landlords can be held accountable, and these can be robustly enforced. My department is working with MHCLG to increase enforcement activity and to make our data available to make that easier. One example is Awaab’s law, which came into force in the social rented sector in October last year. It means that all social landlords must repair all emergency hazards within 24 hours and fix dangerous damp and mould within fixed timescales. That will be extended further in phase 2. I am grateful to my noble friend for raising this issue, and I assure her that the Government are on it.