Local Housing Allowance
Local Housing Allowance growth tracks rent growth closely, especially over 2015 to 2024, and that is expected. LHA rates, the cap on housing support for private renters, are set from the cheaper end of local rents (the 30th percentile), so they mostly restate what rents have already done (rank correlation 0.37 for 2019 to 2024, 0.65 for 2015 to 2024).
The link is weaker over 2019 to 2024 partly because rates were held flat for long stretches: from April 2016 to March 2020, and from April 2021 to March 2024. They were reset in April 2020 and April 2024, by about 17% and 15% in the typical council, so LHA moved in steps while rents moved month by month.
We show it as a check on the rent figures and to be clear about why it doesn't belong in a list of causes. England only, because Welsh and Scottish rates aren't yet in our data.
Frequently asked questions about local housing allowance and rents
Does Local Housing Allowance drive rents up?
The data can't show that, and the design points the other way. LHA rates are set from the cheaper end of local rents (the 30th percentile), so they mostly restate what rents have already done. That is why the link is strong (rank correlation 0.37 for 2019 to 2024, 0.65 for 2015 to 2024) and why we treat LHA as a check on the rent figures, not a cause.
What is Local Housing Allowance?
The cap on housing support for private renters claiming Housing Benefit or the housing element of Universal Credit. Rates are set for each broad rental market area by bedroom entitlement.
Why is the 2019 to 2024 link weaker than 2015 to 2024?
Rates were held flat for long stretches: from April 2016 to March 2020, and from April 2021 to March 2024. They were reset in April 2020 and April 2024, by about 17% and 15% in the typical council, so LHA moved in steps while rents moved month by month.
Does this cover Wales and Scotland?
This page uses England only, because Welsh and Scottish rates aren't yet in the figures it compares.