Only 5% of private rental listings in London are affordable to households who use Local Housing Allowance (LHA) to pay their rent, new research has found.
This is despite the fact that LHA was raised in April to cover the lowest 30% of local market rents.
Because the uplift used rental data from September 2023, ‘rapidly rising’ rents mean the allowance no longer reflects market conditions, according to London Councils.
Research commissioned by the cross-party group also found that 45,000 rental properties in London were sold without being replaced between April 2021 and December 2023 – a loss of 4.3% of the capital’s privately rented homes.
London Councils said the issue was particularly affecting more affordable properties, with the availability of lower-cost rental homes dropping by 3.3% per month in 2023, compared to 2.6% per month across the rest of London.
London Councils’ executive member for housing and regeneration, Grace Williams, said: ‘London’s homelessness emergency is fundamentally driven by the chronic shortage of affordable housing.
‘The falling number of privately rented homes and worsening shortage of affordable accommodation are an urgent challenge for Londoners and London boroughs.’
Ahead of the Budget, the cross-party group called for LHA rates to be updated annually to track market rents.
