SimplyPhi’s 2025 Regional Housing Market Report, which analyses private rental data alongside Local Housing Allowance (LHA) rates, shows that average rents in all nine regions of England exceeded LHA levels throughout the year. The LHA rate sets the maximum housing benefit a private tenant can claim.
The report highlights a substantial affordability gap, with monthly shortfalls between market rents and LHA rates ranging from £377 to £1,194. This gap means LHA often falls short of covering rental costs, increasing the risk of households facing housing insecurity.
While Q2 2025 saw the highest number of rental properties in England at 77,458, supply fell to 71,630 by Q4. Properties affordable within LHA levels remained extremely limited, averaging just 1,154 listings per quarter, or 1.5% of the market.
Omar Al-Hasso, CEO of SimplyPhi, commented: “Our 2025 Regional Housing Market Report highlights two key drivers of England’s housing crisis – the widening gap between LHA rates and average market rents, and the minuscule volume of properties accessible at LHA rates. Q2 2025 saw high levels of supply in the rental market – which dropped in Q4 2025 largely due to landlords adopting a cautious approach following the Autumn Budget – however the number of homes available at LHA rates remained stubbornly flat at less than 2% across England. This highlights that an increase in the supply of private rental homes does not “trickle down” to the low-income sector.
“The gaps between average market rents and LHA rates are becoming permanent because LHA rates have been frozen for the 2025/26 year. The continued LHA freeze has effectively institutionalised an affordability gap that now forces record spending on Temporary Accommodation (TA). Even when market rents slightly dip, the “benefit gap” is so large that it makes no difference to the families who are currently priced out.”
SimplyPhi’s Report also highlighted that less than 2% of the two-bedroom homes on the market in 2025 across England were available at LHA rates, equivalent to less than 600 of 29,808 properties.
Al-Hasso added: “With over 131,000 households in TA, including more than 169,000 children, the two-bedroom market is the primary destination for families moving out of TA. Frustratingly, these properties are seeing the most aggressive competition between professional sharers and low-income families. This is leaving many vulnerable families stuck in unstable living conditions and unable to bridge the gap between LHA and market rents. At this stage, we run the risk of homelessness becoming an inevitability rather than a risk.
“Aside from the sheer lack of truly affordable homes on the market for those in TA to move into, the impact of capping housing support at outdated rates has effectively transferred the financial burden of housing the poorest families onto local council budgets. This fiscal “leakage” is most visible in TA spending, which reached a record £2.8 billion in 2024/25. For many councils, this expenditure is no longer a manageable budget line, but a threat to overall financial solvency, forcing cuts to other statutory services to cover the soaring cost of nightly-paid emergency accommodation.
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