The government has confirmed that Local Housing Allowance (LHA) used for Housing Benefit and the housing element of Universal Credit will be fixed at the levels determined on 31 January 2024 for the whole of calendar year 2026. The instrument-signed by Minister of State Stephen Timms-was made on 6 January 2026, laid before Parliament on 8 January 2026, and comes into force on 30 January 2026, applying in England, Wales and Scotland.

In practical terms, rent support will not reflect any changes in market rents since January 2024. LHA is set for each Broad Rental Market Area (BRMA) and for each dwelling category, and it caps the maximum housing support a claimant can receive. Any rent above the relevant LHA must be met by the tenant from other income or reduced by negotiation with the landlord.

This policy choice matters because the private rented sector has been moving unevenly. Where asking rents have risen since early 2024, the fixed LHA creates a larger gap between the benefit cap and actual rents. Where local rents have been flat or falling, the effect is smaller. For households relying on benefits-fully or partially-the shift is immediate and visible in monthly budgets.

A worked example helps. Take a two‑bed home with an LHA of £750 set in January 2024. If comparable listings are now £810, the shortfall becomes £60 per month, or £720 a year. That gap must be found from other benefit elements, wages, savings, or avoided by moving, sharing, or renegotiating terms. The maths becomes tighter the higher the local rent growth since that 2024 baseline.

The single room rate (Shared Accommodation Rate) follows the same rule. If the LHA for a room in shared housing was £400 in January 2024 and typical room rents have since moved to £450, an under‑35 renter restricted to the shared rate faces a £50 monthly gap. For many, that is the difference between a manageable budget and persistent arrears risk.

For landlords, gross yields do not change on day one, but cashflow risk does. Benefit‑dependent tenants face larger affordability tests, which can show up as slower lets, higher arrears, or requests for guarantors and bigger deposits. Some landlords may pivot towards working‑household tenants or shorter agreements to manage risk; others will hold and prioritise renewals with proven payers. In tight local markets, pricing power remains with landlords; in softer ones, the LHA anchor becomes a reference point in negotiation.

Local authorities will feel the knock‑on effects. Temporary accommodation budgets and prevention work already absorb a growing share of spend in many councils. With LHA fixed, more cases may require Discretionary Housing Payments to bridge gaps, or earlier interventions to avoid homelessness. Without additional central support, that pressure is absorbed within existing allocations, forcing trade‑offs elsewhere.

BRMA boundaries also matter. Two streets apart can mean two different allowances if they sit in different market areas. Renters should check the precise BRMA and the dwelling category that applies to their property, as the correct classification can materially change the support available. Schedules are published by the Valuation Office Agency in England and Wales and by Rent Service Scotland.

The Department’s note to the instrument states that no, or no significant, impact is foreseen. Our reading is that the headline fiscal impact may be modest, but the distributional effects are not: areas with faster post‑2024 rent growth will see widening shortfalls, while low‑growth localities see little change. That unevenness is what households, councils and lenders will need to plan around in 2026.

Key dates are clear. The order was made on 6 January 2026, laid before Parliament on 8 January 2026, and commences on 30 January 2026. For 2026 determinations, the figure that matters is the number on the sheet as at 31 January 2024. Unless a later instrument changes course, those levels frame housing support throughout 2026.

For investors and SME landlords, the checklist is straightforward: stress‑test rents against the relevant LHA; assume slower re‑letting if you target benefit‑receiving tenants; and price in a higher arrears buffer. For renters, verify your BRMA and property category, and if there’s a gap, approach negotiation early-small monthly reductions agreed now often beat costly moves later.

The bigger picture is about affordability. Fixing LHA provides fiscal certainty, but it transfers more of the adjustment to tenants and councils where market rents have run ahead since early 2024. Watch three signals through the spring: advertised rents relative to LHA, local use of Discretionary Housing Payments, and landlord tolerance for arrears. Together, they will tell us whether this freeze merely trims budgets-or meaningfully reshapes who can rent where in 2026.