Local Housing Allowance (LHA)
Quick answer
The Universal Credit / Housing Benefit element used to calculate the maximum rent the state will support for a tenant on benefits. Set at the 30th percentile of local market rents and frozen for long periods, with cash-terms uplifts at the 2024 Autumn Statement and ongoing periodic reviews. Materially below market rent in most of London and the South East, which is why LHA-only tenancies often need a guarantor or top-up payment from the tenant.
At a glance
- Set at
- The 30th percentile of local market rents
- Reviewed
- By broad rental market area; frozen for long periods
- Shortfall
- Anything above LHA is the tenant’s to fund
- Direct payment
- Available to the landlord where arrears build
Full guide
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Open full guideWhy Local Housing Allowance (LHA) matters for landlords
LHA sets the ceiling of what the state will contribute, and because it is pegged to the 30th percentile and then frozen between uprating decisions, it drifts further below actual market rents the longer a freeze runs. The practical consequence for a landlord is that a tenant on benefits in an average-priced property is funding a shortfall from money intended for other things, which is a structural arrears risk rather than a character question. Two things follow: assess affordability on the tenant’s total income including the shortfall, and know that where arrears reach the threshold you can apply for the housing element to be paid direct to you rather than waiting.
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Official sources
LetCompliance editorial reviews this entry every quarter against the sources above. Always confirm specific duties with a qualified solicitor or your local council.
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