Scottish housing secretary Màiri McAllan has written to the UK government, warning that current rates local housing allowance (LHA) are failing to keep pace with the cost of renting, increasing the risk of homelessness and placing additional strain on local authorities and temporary accommodation budgets.
While housing policy is devolved, LHA rates remain reserved to Westminster. The current approach is unsustainable, and we are continuing to call for meaningful reform to ensure welfare support reflects real-world rental costs.
Propertymark says that the concerns concerns raised by the Scottish housing secretary echo what it has long said about the knock-on effects of inadequate housing support.
The trade body has repeatedly warned that freezing LHA during a period of rising rents undermines affordability in the private rented sector and reduces access to housing for those who need support most. Our policy work shows that when LHA does not reflect real rents, the financial burden is pushed onto other tenants, landlords, and local authorities.
In Scotland, freezing rates of support in 2026-27 will mean that 87 of the 90 LHA rates will fall below the 30th percentile of local market rents. The Scottish government estimates that around 45,000 households in Scotland, including approximately 31,000 children, could be adversely impacted by the end of 2026-27.
Timothy Douglas, head of policy and campaigns at Propertymark, commented: “Propertymark has long called for Local Housing Allowance (LHA) rates to be restored so they reflect real market rents. The longer the UK Government continues to freeze LHA, the greater the gap becomes between support and actual housing costs, and the more expensive it will be to realign LHA with the market in the long term.
“Freezing LHA for 2026/27 will only exacerbate the affordability crisis facing many renters, pushing some further into financial hardship and making it harder for them to secure or sustain a stable home. Increased regulatory and financial pressures, including tax rises for landlords, alongside a growing imbalance between supply and demand, are continuing to drive rents up across many parts of the UK.
“As a result, keeping LHA rates frozen widens the shortfall between housing support and real rents, increasing the risk of homelessness and placing additional strain on already stretched local services. Propertymark is clear that LHA should, as a minimum, be set at the 30th percentile of local market rents, if not the 50th percentile, to give renters a realistic chance of accessing and maintaining suitable housing.
“We urge the UK government to reconsider this freeze and work with the devolved administrations to ensure housing support keeps pace with the realities of the rental market.”