The Resolution Foundation has issued a stark warning ahead of next month’s budget: more than 1.1 million low-income families in private rented homes are heading for a severe affordability crunch. The thinktank calculates that a typical household needing a two-bedroom property now faces a weekly gap of £158 between their rent and the support provided by local housing allowance, which has been frozen in cash terms since autumn 2024.
The freeze means the allowance has not budged while market rents have continued to climb. Campaigners are urging the chancellor to unfreeze LHA rates, arguing that without intervention, hundreds of thousands of households will be pushed deeper into financial distress. The call comes as the cost of living remains stubbornly high and renters in particular find themselves squeezed from multiple directions.
Where renting is most concentrated
To understand which communities could be hit hardest by the freeze, Postcodes UK has examined the geography of private renting. The data shows that the postcode district with the highest proportion of renters is LS2, covering central Leeds, where 11.1% of residents rent their homes. This concentration makes it a bellwether for the pressures described by the Resolution Foundation.
| District | Post town | Region | Homes owned |
|---|---|---|---|
| LS2 | Leeds | Yorkshire and The Humber | 11.1% |
| SR1 | Sunderland | North East | 11.9% |
| S1 | Sheffield | Yorkshire and The Humber | 13.3% |
| BD1 | Bradford | Yorkshire and The Humber | 13.5% |
| LE1 | Leicester | East Midlands | 14.8% |
| L1 | Liverpool | North West | 15.1% |
| HU1 | Hull | Yorkshire and The Humber | 16.1% |
| NE1 | Newcastle upon Tyne | North East | 16.1% |
| M50 | Salford | North West | 16.9% |
| EC1N | London | London | 17.2% |
Why LS2 stands out in the affordability debate
The prominence of LS2 in the renting figures is significant. A district where more than one in ten people are tenants is likely to contain a substantial number of households reliant on housing benefit or the local housing allowance. When the allowance is frozen while rents rise, the shortfall does not distribute itself evenly. It lands most heavily in places where renting is the norm rather than the exception.
The £158 weekly gap identified by the Resolution Foundation is a national average, but in high-rent districts the real-world deficit can be even larger. Central Leeds has seen sustained demand for rental properties, driven by a growing population of students, young professionals and service-sector workers. Many of these tenants are on modest incomes, and for those eligible for housing support, the frozen allowance simply does not keep pace with what landlords are charging.
Postcodes UK analysis suggests that when a single district accounts for such a high share of renters, the knock-on effects of policy decisions become highly localised. A freeze that looks like a line on a Treasury spreadsheet translates, in LS2, into families having to find extra money each week just to keep a roof over their heads. The Resolution Foundation’s warning is not abstract; it plays out street by street in postcodes like this one.
The data behind this
The renting rates cited in this article are drawn from the Postcodes UK database, which aggregates official statistics at the postcode district level. The underlying sources include the HM Land Registry for property transaction and tenure data, the Office for National Statistics census for household composition and housing arrangements, and the Postcodes UK database for geographic boundaries and demographic profiling. These combined sources allow us to pinpoint where renting is most prevalent and where policy changes such as the LHA freeze are likely to have the greatest impact.
In response to reporting by Guardian Housing. Analysis and figures by Postcodes UK.