What the numbers measure
LHA sets the maximum housing element a private tenant can receive through Universal Credit or Housing Benefit. Propertymark's letter cites February 2025 research showing 2.7% affordability, but the source, methodology and geographic breakdown are not disclosed. The comparison with 12% in 2021-22 suggests a sharp contraction, but without property type, bedroom category or regional variation the operational read is limited.
The claim that frozen LHA rates create arrears risk is logical but not quantified. Propertymark has not published data linking the size of the LHA shortfall to arrears rates, tenancy length or possession claims. Agents working in areas where LHA still covers a higher proportion of lower-value stock may see different outcomes to those managing mid-market portfolios in high-demand zones.
Universal Credit pays the housing element to claimants by default, not landlords, unless a Managed Payment to Landlord or Alternative Payment Arrangement is agreed. That adds a collection risk on top of the funding gap. Arrears may accumulate before landlords secure direct payment, and the DWP retains discretion over whether to approve the arrangement.
The compliance gap
Propertymark supports anti-discrimination provisions in the Renters' Rights Act but notes they will have limited effect whilst housing support leaves most homes beyond claimants' means. The letter argues that adequate LHA rates would help tenants pass affordability checks and give landlords confidence to offer tenancies. That logic assumes landlords are willing to let to benefit claimants when LHA is sufficient, a claim not supported by landlord survey data or letting volumes in the source material.
Letting agents must now reconcile legal protections against benefit discrimination with fiduciary duties to landlords. An affordability assessment that flags a monthly shortfall of £300 between LHA and rent is not discriminatory if applied consistently, but agents need documented criteria and evidence that the same test applies to all applicants regardless of income source.
Guarantor referencing becomes critical. A guarantor with sufficient income and a clean credit file may satisfy affordability requirements, but agents should verify that guarantors understand the scale and persistence of the shortfall. A one-off payment to cover a deposit is different from an ongoing commitment to fund several hundred pounds per month indefinitely.
What Propertymark wants
The letter requests that LHA be restored to the 30th percentile of local rents with annual indexing. Propertymark also seeks eventual progression to the 50th percentile when public finances allow, alongside better local market data. The 30th percentile benchmark would align with the pre-freeze methodology, but the proportion of stock that would become accessible at that level is not specified.
Propertymark has asked the DWP to publish data on Crisis and Resilience Fund applications, including volumes, repeat requests, approvals, refusals and amounts paid towards rent. The fund is intended to bridge emergency shortfalls, but transparency on approval rates, adequacy and repeat claims is absent. If the fund is absorbing recurring shortfalls rather than one-off crises, that suggests systemic underfunding rather than emergency relief.
Timothy Douglas, Propertymark's head of policy and campaigns, said that frozen LHA rates undermine affordability and reduce access to housing for those who need support most. He added that the situation increases homelessness risk and places additional strain on local authorities and temporary accommodation budgets. No DWP or ministerial response is included in the source material.