Local Housing Allowance will increase from 1 April for the first time since April 2020. Yet Savills research has found the average rise of 17% across the UK falls short of the 28% average growth in private rents in the four years to September 2023 (see Figure 1, below).

Savills’ analysis of private rent listings on Zoopla for 2023 shows that the new LHA rates would cover 8.5% of properties – the target is for at least 30% of private rental homes to be affordable in any area.

Steve Partridge, director at Savills Affordable Housing Consultancy, said: “Issues of affordability are not exclusive to those reliant on LHA or the private rented sector. They impact all tenures and are a result of a shortage of supply of housing to both rent and buy, combined with a spike in housing demand. This emphasises the need for delivery of more homes of all tenures.

“Increased housing supply would also help reduce the numbers of people living in temporary accommodation. According to government figures, there were 105,750 households living in temporary accommodation in England in 2023. This was the highest level on record and 10.5% above the year before.”

Savills’ analysis shows that Scotland has the highest proportion of affordable listings, at 14.9%, followed by England at 8.2%. Wales has the lowest proportion of listings that are affordable at 5.5%.

Notably, no area in Britain achieves the 30% target for affordability, with Lincoln having the highest coverage of 24.5% of new listings.

Affordability differs significantly across property sizes. LHA rates cover more one-bedroom properties (15.7%) than any other size of property, followed by four-beds (9.8%). This is over double the proportion of affordable two-bedroom and three-bedroom listings, at 4.8% and 4.3% respectively. Yet these are often the most in demand and suitably sized properties for households, with 59% of housing benefit claimants in the PRS having at least one dependent child, according to the English Housing Survey in 2022-23.

LHA increases compared to rental growth