Local Housing Allowance
(LHA)
Local Housing Allowance is the basis for calculating Housing Benefit or Universal Credit housing costs for private renters. The rate is set at the 30th percentile of local rents in each Broad Rental Market Area and depends on the number of bedrooms the claimant is entitled to based on their household size. LHA rates are reviewed annually and have been frozen in many areas, creating a growing gap between benefit levels and actual rents.
Local Housing Allowance (LHA) is used to calculate Housing Benefit (for older legacy claimants) or the housing cost element of Universal Credit for private renters. The rate is set at the 30th percentile of rents in the Broad Rental Market Area (BRMA), based on bedroom entitlement: 1 bedroom for a single person under 35 (shared accommodation rate), scaling up to 4 bedrooms for larger families. LHA rates were frozen between 2020 and 2024, causing significant shortfalls against actual market rents. In 2024 they were restored to the 30th percentile, but ongoing freezes may widen the gap again. Claimants who find cheaper accommodation keep the difference (for up to 52 weeks); those who pay above the LHA rate must fund the gap themselves. Discretionary Housing Payments (DHPs) from the council can help bridge shortfalls in genuine hardship. LHA does not apply to social housing tenants; their eligible rent is based on their actual rent subject to bedroom standard rules.
Related terms
Related guides
Local Housing Allowance Rates Explained
Local Housing Allowance (LHA) is the system used to calculate the maximum Housing Benefit or Universal Credit housing cost element that private tenants can receive. Understanding how LHA rates are set, and what bedroom size you are entitled to, is crucial for budgeting and understanding any shortfall between your benefit and your rent.
6 min read
Housing Benefit for Private Tenants
Housing Benefit helps pay rent for people on low incomes. For most working-age people, it has been replaced by Universal Credit. However, Housing Benefit continues for pensioners and some other groups. Understanding the rules — including how Local Housing Allowance (LHA) limits your entitlement — is essential if you are a private tenant relying on benefit to pay rent.
7 min read