The all-party House of Commons Works and Pension committee wants the government to pass regulations for Local Housing Allowance rates to be updated automatically every year.

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Since April 2020 LHA rates have been frozen and the Institute for Fiscal Studies research showed that since four years ago. the  percentage of new private rental properties on Zoopla that private renters receiving LHA can afford has plummeted from 23 per cent down to a paltry 5 per cent.

From next month the Local Housing Allowance rate will at last cover the bottom 30th percentile of local market rates across Britain. However the Institute for Public Policy Research is convinced that when the rate is unfrozen, more than 800,000 households on Universal Credit  will still have to contend with shortfalls between the rents they have to pay and their housing support payments.

Currently housing benefit rates are set to be put back into the freezer once again from April next year.

One of nineteen  recommendations recently released, says: “The evidence is clear that support for housing costs cannot be viewed in isolation from wider support provided through other benefits. When and if claimants experience a shortfall in rent, this can impact other parts of household budgeting and erode income otherwise intended for daily living costs. The Government should make a commitment to uprate annually Local Housing Allowance so that it retains its value at the 30th percentile of rents in a Broad Rental Market Area (BRMA).”

The report also includes a far more general recommendation for all benefits and not just LHA which says: “There remains uncertainty for some benefits each year as to whether they will be uprated. We agree with the assessment of the Secretary of State that it is important that “there is an element of fairness to the consistency” of how uprating decisions are made. From financial year 2025–26, the Government should make an ‘Uprating Guarantee’ to uprate benefits annually with a consistent measure, for example prices … If the Government decides to deviate from the ‘Uprating Guarantee’, it should clearly set out its reasoning to Parliament. The Government should also undertake work to understand what impact the decision to not follow consistent practice would have on its benchmark of objectives for benefit levels.”

The Committee’s chair. Labour MP Sir Stephen Timms, says: “It is right that our benefit system incentivises work, but it should also provide an effective safety net for jobseekers, people on low incomes, carers and those with disabilities.  We have heard plenty of evidence that benefits are currently at a level that leaves many unable to afford daily essentials or meet the unavoidable extra costs associated with having a health impairment or disability.

“The Government has previously said that it is not possible to come up with an objective way of deciding what benefits should be.  Our recommendations are a response to that challenge, and the ball is now back in the Government’s court.

“On top of acknowledging and acting on a new benchmark and objectives linked to living costs, Ministers should commit to consistent uprating of benefits each year.  It is time to end the annual ‘will they or won’t they’ speculation and all the worry that brings to those who rely on the social security system for financial support.”

A spokesperson for a trade body responding to the recommendations by MPs on the Work and Pensions Select Committee, says: “We welcome the Committee’s call for housing benefit rates to be reviewed annually in line with housing costs. This has been a longstanding call by us and others. Too often the housing benefit system has left tenants and responsible landlords not knowing if rents can be covered from one year to the next. What should be a safety net has become a source of frustration and anxiety.

“All parties need to provide certainty for those reliant on benefits that they can keep a roof over their heads by ensuring rates permanently remain linked to market rents.”

Generation Rent fully backs the recommendations with its chief exec Ben Twomey saying: "This recommendation is very welcome and guaranteed support for renters in need is long overdue. Certainty for people receiving Local Housing Allowance means that the situation of the last few years, where these benefits remained frozen while rents soared, would not be able to be repeated.

"Generation Rent have been campaigning on this issue for a long time and are glad to see that reflected in the committee's report. We urge the government to adopt these findings at the earliest possible opportunity to reduce homelessness and mend the broken safety net for those in need.