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Local housing allowance news: what landlords need to know about the 2026 rates

The Local Housing Allowance (LHA) rates were frozen at 2024 levels again in April 2025, building on previous updates around rental support available for private tenants across England, Scotland, and Wales. These policy changes were designed to address ongoing rent increases and the rising cost of living, directly affecting millions of households and thousands of landlords.

What happened with Local Housing Allowance rates in 2025-2026

The Department for Work and Pensions (DWP) confirmed that for the 2025-2026 financial year, the LHA rates continue to be set at the 30th percentile of local market rents in each Broad Rental Market Area (BRMA), following earlier permanent reforms to better match benefit levels with private sector rent prices.

For the latest rates, the DWP published Official LHA rate tables for 2025-2026, which apply from April 2025 to March 2026 across England, Scotland, and Wales. These rates are available via the government’s downloadable CSV files and set the maximum Universal Credit and Housing Benefit entitlements for each property category.

Landlords should be aware that there is no policy commitment to automatically uprate LHA rates annually according to inflation or rent growth beyond this period. Future rates will remain subject to government review and annual spending decisions.

The key 2025-2026 announcement details

  • LHA rates remain pegged to the 30th percentile of local market rents for each BRMA.
  • Revised monthly benefit caps for each category—from shared accommodation to 4-bedroom properties—are now in place for the 2025-2026 financial year.
  • The changes reflect the government’s ongoing effort to align housing support more closely with real rental costs, improving access for benefit-receiving tenants.
  • All rates and details are available in the official publication.

Why this matters for landlords and agents in 2025-2026

These continuing changes to LHA rates have important implications for landlords managing properties let to tenants who receive housing benefit or Universal Credit. Understanding the updated caps, as well as how changes are announced and reviewed, will help you set sustainable rental strategies and make informed decisions about your properties and tenant demographics.

Impact on rental income and tenant accessibility

Because LHA rates are still set at the 30th percentile, benefit-receiving tenants in 2025-2026 continue to have broader access to affordable homes within BRMAs, which can expand a landlord’s pool of potential tenants. However, in high-rent areas where market rates have risen sharply, the LHA may lag behind actual rents unless further uprating occurs.

With no guarantee of future annual increases, landlords must still plan for possible shortfalls between LHA rates and rising rents, and consider affordability for benefit-receiving tenants.

Industry reaction and ongoing challenges

Industry groups largely welcomed the government’s continuation of the 30th percentile policy for 2025-2026 but maintain concerns about the sufficiency of LHA levels if rent inflation outpaces benefit uprating. Professional associations and homelessness charities continue to call for regular review and alignment of LHA rates with prevailing market rents.

The sector remains attentive to both the evolving LHA rates and parallel challenges around Section 21 reform, court backlogs, and landlord confidence in providing homes for benefit-dependent tenants.

What to do next: practical steps for landlords

Review your current LHA exposure

Use the DWP’s 2025-2026 LHA tables or the LHA-Direct tool to confirm the new rates for your rental locations. Check whether property categories (from shared accommodation to large family homes) now qualify for increased benefit caps in your area.

Consider your tenant mix strategy

With the updated 2025-2026 rates in effect, re-evaluate the viability of accepting benefit-receiving tenants given the maximum LHA support in your rental areas.

Stay informed about policy developments

Monitor future changes to LHA policy and annual announcements from DWP, as decisions on further uprating can impact rental income and long-term tenant stability.

Professional support options

Organisations such as Total Landlord, mydeposits, and Landlord Action continue to offer specialist advice and support services to help navigate the benefit system and manage risk.

Key dates and policy context

  • LHA rates for 2025-2026 apply from April 2025 to March 2026 for all new and existing eligible Universal Credit and Housing Benefit claims in the private rented sector.
  • LHA remains at the 30th percentile of local market rents, as determined by the latest available data for each BRMA.
  • Future uprating beyond 2026 will depend on further government review.

Market perspectives and future outlook

Sector representatives, such as the National Residential Landlords Association and homelessness charities, remain focused on ensuring that LHA rates continue to track market rents effectively. Regular and transparent review is seen as essential to prevent benefit shortfalls and the risk of increased arrears, evictions, and homelessness.

As housing affordability and supply pressures persist, ongoing collaboration between landlords, government, and sector bodies will be vital for long-term stability.

FAQs about Local Housing Allowance changes

What is Local Housing Allowance and how does it work in 2025-2026?

LHA sets the maximum housing support that claimants of Universal Credit or Housing Benefit can receive for private rentals, calculated at the 30th percentile of local rents in each BRMA. The 2025-2026 rates are available on the DWP website.

How do I find the latest LHA rates for my area?

Use the LHA-Direct online tool or download the government’s rate tables for your region.

Will LHA rates rise again next year?

There is no automatic annual increase; future rates depend on government review and announcements.

Do 2025-2026 rates apply to existing tenancies?

Yes, new rates apply to all eligible new and existing claims during the 2025-2026 year.

What support is available for landlords?

Professional landlord organisations and specialist advice services are available to help manage benefit-receiving tenants under the 2025-2026 system.

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