Scotland’s Housing Secretary has written to the UK government warning that the continued freeze on Local Housing Allowance is pushing low-income renters out of the private rented sector.
In a letter to Housing Secretary Steve Reed, Màiri McAllan urges ministers to reverse the freeze and restore LHA rates to cover at least the 30th percentile of local rents. The second consecutive year of frozen rates announced in the Autumn Budget means support will fall further behind actual rents in 2026/27.
45,000 Scottish households affected
The Scottish government estimates that 87 of Scotland’s 90 LHA rates will fall below the 30th percentile of market rents by the end of 2026/27. Up to 45,000 households – including approximately 31,000 children – are expected to be adversely affected.
Ms McAllan said in the letter: “At a time of continued high rents, the decision to freeze LHA rates makes it harder for low-income households to access and sustain tenancies in the private rented sector.”
She added that UK-wide analysis by the Joseph Rowntree Foundation shows around half of those receiving housing support are already living below the poverty line.
Industry calls for 50th percentile target
Timothy Douglas, head of policy and campaigns at Propertymark, said the longer the freeze continues, the greater the gap between support and actual housing costs will become. “Freezing LHA for 2026/27 will only exacerbate the affordability crisis facing many renters,” he said.
Propertymark argues LHA should be set at the 50th percentile of local market rents to give tenants a realistic chance of securing suitable housing.
Temporary accommodation subsidy also frozen
Ms McAllan also raised concerns over housing benefit subsidy arrangements for temporary accommodation. Councils currently receive a subsidy equivalent to 90 percent of the 2011 LHA rate – an arrangement frozen for almost 15 years despite substantial cost increases.
“The subsidy system is placing an unfair burden on local authorities,” she said, calling for an urgent review.
Editor’s view
For landlords, the LHA freeze creates a practical problem: it limits the pool of tenants who can afford market rents with housing support. For the sector as a whole, it adds to the pressures driving compliant landlords out of areas with high benefit-dependent tenant populations.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 9 February 2026
Sources: Scottish Government, Propertymark, Joseph Rowntree Foundation
Related reading: Rent arrears climb as local authorities face growing tenant debt pressures
