“The new government is repeating the same mistakes of the old one, freezing this vital lifeline and pushing people to live on a knife-edge.”
Labour opted to refreeze the LHA rate at the autumn budget rather than raise it in line with market rents as the Tories had done in April this year following a four-year freeze.
SHP said raising the LHA rate would prevent Londoners from falling into rent arrears and facing eviction as well as offering people living in temporary accommodation and hostels a viable route into the private rented sector.
Around 5% of private rented properties in London are affordable for people on housing benefit impacted by LHA, the charity said.
The homelessness emergency in London has been driven by a surge of people living in temporary accommodation.
One in 50 Londoners are currently living in temporary housing, costing London boroughs around £4 million a day with spending jumping 68% in the last year alone, according to London Councils.
Ian, 61, has been caught up in the crisis. He spent his career as an antiques dealer in Europe, but now he’s stuck in emergency accommodation.
“Single Homeless Project has helped me get back on my feet. I’m ready to move on and rebuild by life, but it’s been three months and counting,” said Ian.
“I’m proactive, I’m going to viewings, I walk everywhere to save any cash I have, but when I look at the budget, none of these places are affordable. I’m ready to work again, but I need that stable base first. I’m staying positive, but it is frustrating being here when I’m ready to live my life again.”
Tadhg Mockler manages one of SHP emergency accommodation services in north-west London.
The service is designed to help people experiencing homelessness to move on into private rented properties or social housing within 28 days.
But Mockler insisted LHA was proving the biggest barrier to moving people into their own home.
Mockler said people in north-west London are typically entitled to £1,096 a month in housing benefit but receive £1,021 because of the benefit cap.
“The cheapest monthly rent I’ve found is £1,100 for a one bed with shared facilities. The maths doesn’t add up and people aren’t being given a fair chance. It is a system that strips people of their dignity and sets them up to fail,” said Mockler.
He added: “Hands down, the biggest barrier I face in helping people who are ready to move into the private rented sector is the low level of local housing allowance and benefit cap. And I’m really worried about next year when the property rates go up and the allowance stays frozen. It’s so frustrating watching someone’s potential stagnate for months because of a broken system.”
While Labour opted not to raise LHA rates at October’s autumn budget, the government has recently announced £1bn in funding to tackle homelessness and rough sleeping in 2025-26 with a particular focus on prevention.
Housing secretary Angela Rayner said: “This largest-ever investment marks a turning point, giving councils the tools they need to act quickly and put in place support for people to tackle, reduce and prevent homelessness. It’s time to turn the tide.”
This Christmas, Single Homeless Project is asking for donations to help Londoners through the winter and leave homelessness behind for good. To donate, visit www.action.shp.org.uk.
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