According to a recent analysis by the Institute for Public Policy Research (IPPR), rising rents, a lack of funding for social housing, and government housing support shortages have put almost a million children in the UK at danger of financial difficulty. According to the report, 90,000 additional families would face difficulty in the upcoming year as a result of the Local Housing Allowance (LHA) being frozen in spite of rising living expenses.
The results show that low-income households are under increasing strain in the private renting market, where rent increases are exceeding government assistance. The analysis cautions that if immediate legislative changes are not made, families’ financial burden would intensify, leading to a greater need for food banks and a rise in socioeconomic disparities.
Government Housing Support Fails to Keep Pace With Rising Rents
After being cut in 2011, the Local Housing Allowance (LHA), which establishes the amount of housing allowances for low-income private renters, has since fallen behind market rates. Since the LHA was first created to cover the cost of the 30% of rental houses that were the cheapest in a certain location, it has not been regularly updated to account for changes in rental prices, forcing families to use their income for needs to make up the difference.
Repeated freezes on the LHA by Conservative governments have exacerbated this issue, forcing families to allocate portions of their universal credit and other benefits towards rent, rather than essentials such as food and energy. This has resulted in a growing number of children living in financially precarious conditions.
The Labour government, which has taken office, has yet to confirm whether it will lift the freeze in April 2025. According to Professor Ashwin Kumar, a co-author of the report, the failure to align LHA with rent increases means that families are left with fewer resources for essential needs, pushing many towards financial distress.
Social Housing Shortages Contribute to Growing Instability
Beyond benefit shortfalls, the report underscores the role of social housing shortages in the crisis. Over the past two decades, the proportion of children living in private rented accommodation has increased from one in twelve to one in five, further exposing families to unstable rental costs.
The report suggests that an expansion of the social rented sector could provide a long-term solution. Unlike the private rental market, social housing offers more affordable rent levels, which in turn would reduce the need for high housing benefit expenditures. Professor Kumar argues that restoring social housing lost through policies such as Right to Buy, introduced under Margaret Thatcher, would provide greater security for families and reduce the reliance on expensive temporary accommodation.
Meanwhile, the government has defended its approach, pointing to its extension of the Household Support Fund, an increase in discretionary housing payments, and a rise in the National Living Wage. A government spokesperson stated that measures were being developed to ensure children receive a strong start in life, though the report suggests that these initiatives may not be enough to prevent further hardship.
