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Landlord glossaryTenancy

Local Housing Allowance (LHA)

The figure used to work out the most Universal Credit or Housing Benefit will contribute towards rent for a private tenant, based on where they live and how many bedrooms they need. Rates were reset to the 30th percentile of local rents in April 2024 and are not always uprated each year, so in many areas they fall below actual rents. Anything above the rate has to come from the tenant’s other income.

Reviewed by Erdem VolkanLast reviewed 16 September 2026How we check facts

Based on
Local rents in a broad rental market area
Set by
Area and the number of bedrooms needed
Shortfall
Paid by the tenant from other income
Direct payment
A landlord can request it when arrears build

Why it matters

What Local Housing Allowance (LHA) means for a landlord

Local Housing Allowance sets the ceiling on what benefits will contribute to rent. When rates are frozen while rents rise, more tenants have a gap to fund from other income, which is an affordability question to discuss up front rather than a reason to refuse benefit claimants, which the Renters’ Rights Act now makes unlawful. Assess affordability on the tenant’s whole income, and know how to request a managed payment of the housing element if arrears build.

Worked example

How it plays out

A tenant in Brighton on Universal Credit wants to rent a one-bedroom flat for £1,250 a month. The Local Housing Allowance rate for a one-bedroom home in the area is lower, so the housing element will cover only part of the rent. Before agreeing the let, the landlord looks at the tenant’s whole budget, including earnings, and they agree how the difference will be paid.
An illustrative example. Names, places and figures are made up.

Common mistakes

Where landlords go wrong

  1. 01Refusing all tenants on benefits, which is now unlawful discrimination.
  2. 02Assuming the housing element covers the full rent.
  3. 03Not asking about a managed payment when arrears build.

What to do

A short checklist

  • Check the current rate for the property’s area and size on GOV.UK.
  • Assess affordability on the tenant’s whole income.
  • Know how to request a managed payment if arrears reach the threshold.

Sources

Checked against these sources on 16 September 2026. A guide to the rules in England, not legal advice: for a dispute or a possession claim, speak to a solicitor.

All glossary termsRenters’ Rights Act 2025UK regulationsLandlord guides