A man who is unable to work due to a life-altering car accident faces a monthly rent deficit of £450, even though he receives Local Housing Allowance.
Eighteen years ago, Steve Mikellides suffered serious spinal injuries in the crash, resulting in a visible scar on his torso that serves as a “daily reminder of the incident.”
Now 46, Mr. Mikellides, a former sales executive, lives alone in a privately rented apartment in Thornton Heath, south London, but increasing rental prices have left his benefits inadequate to meet his housing expenses.
The government claims it is actively addressing the effects of rising rents, yet the Local Housing Allowance has been intermittently frozen for years, failing to keep up with market rates.
Mr. Mikellides stated, “I experience a monthly rent shortfall of £450, consistently. That amount needs to be covered, offset by my Universal Credit. On payday, I end up utilizing 84.5% of my overall monthly budget, leaving me with just enough for a night out before relying on benefits.”
Support for private renters is limited by the Local Housing Allowance, designed to cover the least expensive third of housing options in an area. However, the enduring freeze has rendered it inadequate against escalating rental prices.
Housing charities and local councils have urged for the freeze to be lifted in the upcoming Budget, following July 2025’s investigation into the financial viability of local authorities.
While no changes were announced, a government spokesperson remarked: “We are addressing the effects of rising rents and the housing crisis through our pledge to construct 1.5 million homes, which includes the largest increase in social and affordable housing in a generation. Additionally, we are investing over £1 billion in homelessness services, initiating a comprehensive government strategy on homelessness, and committing a historic £39 billion to affordable and social housing.”
Sam Thomas, senior policy advisor at the anti-poverty organization Z2K, pointed out that the freeze is contributing to the rise of homelessness. He referenced evidence indicating that lifting the Local Housing Allowance freeze in 2023 led to a decrease in homelessness rates.
He explained, “For individuals currently in temporary housing, one of the most common routes to permanent accommodation is through the private rental market, but the Local Housing Allowance freeze makes this increasingly difficult.”
Jonathan Carr-West, chief executive of the Local Government Information Unit, noted that the freeze is wreaking havoc on the finances of local authorities. He stated, “The difference between what local governments receive from the government to subsidize temporary housing and what they actually need to pay for it exceeds £700 million annually across London. This forces local authorities to tap into their general funds to bridge the gap, resulting in reduced resources for all other services.”
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