Propertymark has voiced its support for Mairi McAllan, who has formally urged Steve Reed, the UK Government’s Housing Secretary, to unfreeze Local Housing Allowance (LHA) rates. With private renters across the country facing sustained affordability pressures, Propertymark acknowledges that action is required to ensure housing support reflects real-world rental costs.
Although housing policy is devolved to the Scottish Parliament and other devolved administrations, LHA rates are set by Westminster. These rates determine the maximum level of support that private renters can receive through Universal Credit or Housing Benefit. Since April 2021, LHA rates have effectively been frozen, despite significant increases in rental prices in many parts of the UK. As a result, the gap between housing support and actual market rents has widened considerably.
The current trajectory is increasingly challenging and LHA rates no longer reflect prevailing market conditions, this has left many low-income households struggling to bridge the shortfall between their benefit income and their rent. This shortfall is compounded by a chronic shortage of homes across both the private and social rented sectors, which continues to drive up rental costs. Without sufficient housing supply to meet demand, affordability pressures continue to intensify, often placing tenants at heightened risk of arrears, eviction, and ultimately a risk of homelessness.
The Scale of the Impact in Scotland
This growing challenge was starkly illustrated in McAllan’s letter, which stated:
“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. We estimate that up to around 45,000 households in Scotland, including approximately 31,000 children, will be adversely impacted by the end of 2026-27.”
These figures underline the scale and urgency of the issue. When LHA rates fall below the 30th percentile of local rents, fewer properties are affordable to those in receipt of housing support, limiting choice and access while increasing financial strain on some of the most vulnerable households.
To address this, Propertymark has consistently campaigned for LHA rates to be restored to at least the 30th percentile of local market rents. In addition, Propertymark is calling for a commitment to annual uprating, ensuring that rates keep pace with changes in the rental market. Such a measure would provide greater certainty and stability for tenants who rely on support to meet their housing costs, enabling them to budget effectively and pay rent in full and on time.
The potential benefits extend beyond Scotland. Restoring LHA rates to the 30th percentile could lift an estimated 75,000 children and 125,000 adults out of poverty across the UK. By narrowing the affordability gap and reducing the risk of rent arrears, this reform would play a meaningful role in tackling poverty and preventing homelessness nationwide.
Propertymark also highlighted these priorities during the lead-up to the UK Government’s Autumn Budget in November 2025. Alongside restoring and uprating LHA, Propertymark has called for the removal of the five-week wait for Universal Credit payments and for greater flexibility to allow tenants to pay rent directly to landlords where they request it. Together, these measures would strengthen financial resilience among renters, improve rent security for housing providers, and contribute to a more sustainable private rented sector.
Propertymark believes that unfreezing and properly uprating LHA are not only a matter of fairness but a practical step towards stabilising the housing system. Without intervention, the disconnect between support levels and real rents will continue to widen, placing increasing pressure on households, housing providers, and public services alike.
