Letting agents’ trade body Propertymark has backed calls to unfreeze Local Housing Allowance rates, warning that the current freeze is widening the gap between benefit payments and real rents – and pushing more tenants toward homelessness.
The intervention follows a letter from Scottish Housing Secretary Màiri McAllan to the UK government, warning that LHA rates are failing to keep pace with rental costs. While housing policy is devolved, LHA rates remain reserved to Westminster.
Timothy Douglas, head of policy and campaigns at Propertymark, said: “Propertymark has long called for Local Housing Allowance 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.”
87 of 90 Scottish LHA rates fall short
In Scotland, freezing rates for 2026-27 will mean that 87 of the 90 LHA rates fall below the 30th percentile of local market rents – the threshold they are supposed to cover. The Scottish government estimates around 45,000 households, including 31,000 children, could be adversely affected by the end of the financial year.
For landlords, the growing shortfall between housing support and market rents makes it increasingly difficult to let properties to benefit-dependent tenants without absorbing losses or raising rents elsewhere in their portfolios.
Douglas added: “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.”
Landlords caught between policy pressures
The LHA freeze comes alongside rising regulatory costs for landlords and higher stamp duty on additional properties. Many landlords who previously accepted housing benefit tenants are now reconsidering, with profitability already under pressure across parts of the sector.
Propertymark argues that LHA should, at minimum, be set at the 30th percentile of local rents – if not the 50th – to give renters a realistic chance of accessing suitable housing. The current freeze means rates in many areas are already years out of date.
Douglas said: “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.”
For more on managing tenant relationships and compliance, landlords can explore specialist support services.
Editor’s view
Frozen LHA rates are squeezing landlords and tenants alike. Either benefits catch up with reality, or more landlords will simply stop letting to claimants – worsening an already dire shortage of affordable housing.
Author: Editorial team – UK landlord & buy-to-let news, policy, and finance
Published: 6 February 2026
Sources: Propertymark, Scottish Government
Related reading: Landlords fear Renters’ Rights Act as 84% predict sector harm
