Sector Budget asks: uprate LHA and temporary accommodation subsidy, and keep Warm Homes Plan

On the Warm Homes funding, Gavin Smart, chief executive at the Chartered Institute of Housing (CIH), Tracy Harrison, chief executive of the Northern Housing Consortium and Kate Henderson, chief executive at the National Housing Federation (NHF), were amongst signatories of a letter ahead of the Budget warning against reducing the allocation.

Matthew Scott, policy manager at CIH, said: “With energy prices set to remain stubbornly high for yet another winter, we need a long-term commitment to making homes warmer and cheaper to heat. Maintaining the full Warm Homes Plan funding at the forthcoming Budget is essential to delivering this.”

Nick Davies, head of climate policy at Green Alliance, said: “Ditching a poorly governed home energy efficiency scheme might look like an easy decision, but a third of English households spent over 10% of their income on energy last year after housing costs.

“So we still need a plan backed with sustained funding for insulating homes and unlocking the bill-cutting benefits of clean technology for more families.”

The NHF has made a number of recommendations, including introducing rent convergence with a £3 per week uplift from 2026. 
It also recommends emergency funding for supported housing, zero-rate VAT on building safety and materials, grant funding of existing homes, uprating LHA, abolishing the two-child benefit cap and removing the household benefit cap.

Rob Parkes, executive director of finance and governance at Yorkshire Housing, said: “We need decisions that give us the certainty to plan, invest confidently and keep delivering for our customers.

“Rent convergence is a key part of that, and it’s why we called for action ahead of the Spending Review. A clear and consistent approach would make long-term planning easier, help us invest in quality, safe homes and give customers confidence about what they’ll pay.

“We’re proud to keep building affordable homes, even in a challenging policy and financial environment, but warm, energy-efficient homes remain just as important. We’re pushing hard to upgrade our existing stock, but delivering improvements at the pace and scale our customers deserve requires long-term funding and a firm commitment from the government.”

Tom Hunt, chair of the Local Government Association’s Inclusive Growth Committee, said: “We have called on the government to uprate temporary accommodation subsidy rates to 90% of the prevailing LHA rates. It makes no sense that the amount local government is reimbursed from housing benefit for temporary accommodation is pegged to rates that are a decade and a half old.

“We would also like government to implement rent convergence from April 2026 at a minimum of £2 per week until all properties have reached formula rents.”

David Bookbinder, director of Glasgow and West of Scotland Forum of Housing Associations, said: “Along with many other housing bodies, our top budget ask is that there’s no further freezing of LHA rates since they were last reset in April 2024.

“Every year that LHA rates are frozen means hundreds of thousands more private renters don’t have enough housing benefit to pay their rent, forcing people deeper into poverty and in turn putting even greater pressure on the social rented sector across the UK.”

Màiri McAllan, Scottish housing secretary, said: “We have created strong foundations in Scotland to ramp up housebuilding through our Housing Emergency Action Plan, which has committed up to £4.9bn to a major programme which will deliver up to 36,000 homes.

“However, these plans could be hampered by the UK government’s planned cuts to our capital funding and in a shortfall in financial transactions, which are a vital tool in delivering homes across Scotland. Plus, [Ms Reeves] could write off local authority Housing Revenue Account debt to encourage more investment in housing.”

Alison Watson, director of Shelter Scotland, said: “We need a capital budget that keeps pace with inflation so we can build the social homes Scotland so desperately needs.

“Councils also need to have adequate funding, especially those facing the largest demand due to the UK Home Office asylum decisions. Austerity policies like the LHA freeze and the two-child limit are pushing families into poverty. They must be scrapped.”

Callum Chomczuk, national director of CIH Scotland, said: “At the Autumn Budget, CIH Scotland stands with colleagues across the UK in urging the government to restore LHA to the 30th percentile and abolish the Shared Accommodation Rate, enabling more people to afford a home in the private rented sector.

“Ending the benefit cap and the two-child limit would be a vital step in tackling poverty across the UK and would prevent the Scottish government from having to divert resources to mitigate this.”

Richard Meade, chief executive of the Scottish Federation of Housing Associations (SFHA), said: “We know from the SFHA’s own research that four in five social tenants report being unable to meet an unexpected bill, while many also facing the impossible choice between heating and eating. 

“Reforms to our social security system, in particular Universal Credit, are therefore well overdue. Universal Credit must provide enough for those on low incomes to afford household basics, and we need to see an end to policies like the two-child limit and the five-week wait which needlessly push families into poverty.

“As not-for-profit organisations, housing associations require certainty and stability to continue investing in their communities, so as well as this much-needed action on the cost of living, it’s vital this week’s Budget provides this stability.”

Homes for Scotland said: “Ahead of the UK Budget, Homes for Scotland urges the chancellor to introduce a UK-wide first-time buyer scheme. Such a measure would support aspiring homeowners, stimulate economic growth and provide the housebuilding sector with the certainty required to invest in more complex brownfield sites.

“Earlier this month, Homes for Scotland outlined to the secretary of state for Scotland the significant challenges currently facing the sector. These include the cumulative cost of regulation, the ongoing decline in the number of small and medium-sized house builders and the need to create a level playing field for investment decisions made by companies operating across Great Britain.”

The British Property Federation said: “We want to see the chancellor do more to unlock the private capital that is primed to invest in new homes, workplaces and infrastructure.

“The most significant barrier at present is development viability – it simply doesn’t make financial sense to build in many places in the UK. These include removing council tax on newly built homes before they are occupied for the first time, which would reduce upfront costs and avoid penalising developments with quicker build-out rates.

“[We also ask for] the restoration of multiple dwellings relief, which would assist with the delivery of a significant number of new build-to-rent (BTR) homes, given that by our calculation its abolition under the previous government stalled the delivery of up to 25,000 new BTR homes. Equally, continuing to reform the planning system, tackle grid capacity and end regulator delays, particularly from the Building Safety Regulator, must be priorities.”

Peter Hawley, director at SOWN Shared Ownership, said: “I am calling on the chancellor to change the status of shared ownership within the government’s housing policy.

“The current income limits of £90,000 in London and £80,000 elsewhere have been frozen while prices have continued to rise. In many higher value areas, including much of the South East, even buying a 25% share of a modest home is now out of reach, yet some households earning just above the cap still cannot buy on the open market.

“A more flexible system that uprates thresholds and allows regional variation would keep shared ownership focused on those who need help most, without shutting out the ‘missing middle’ of would-be buyers.”