The freeze of a major benefit affecting private renters has been announced by the Department for Work and Pensions (DWP).

More than a million private renters on Universal Credit will have their payments frozen at current levels until next year.

Local Housing Allowance (LHA) calculates the maximum housing allowance available to those renting from private landlords.

They are calculated based on the size of the property and its location, but they must match the lowest affordable rents in an area.

Benefit rates are expected to remain at their current levels from April 2025, with Work and Pensions Secretary Liz Kendall confirming that localized LHA rates will be frozen at their current benefit rates until 2026. CambridgeshireLive reporting.

Referring to the autumn budget, the Resolution Foundation’s senior economist, Cara Pacitti, said: “We were really disappointed not to see an increase in local housing benefit, to support renters in low income in their housing costs.

“LHA was increased to match local rents last year. Since then, we have seen rent (price) growth of 8%. This is obviously completely untenable and, for many families, this will lead to very significant gaps between the housing assistance granted to them and the private rents they try to pay.”

LHA was frozen for seven of the 12 years under the previous Conservative government before increasing last year – unable to keep up with rising rental costs.

Ben Twomey, chief executive of Generation Rent, said: “The LHA freeze was in the small print (of the budget). But this will affect 4.6 million people who receive LHA. This seems to us to be a choice by the government which refuses to support those who need it most.

“Half of those who receive LHA have children who depend on it. So it’s really going to cause major problems in terms of poverty, homelessness and increasing rent arrears.”

The Resolution Foundation has suggested that if frozen rates continue, tenants who rely on housing benefit will be left £243 a year worse off and, with rental prices rising, this could eventually lead to a deficit of £743 by the end of the parliamentary term.