Almost one million children in private housing might face rent shortfalls by 2026, research from the Institute for Public Policy Research (IPPR) found.
A mix of welfare reforms, more children in the private rental sector (PRS), and limited investment in social housing is driving this issue, the think tank’s report explained.
The 2011 shift in Local Housing Allowance (LHA) rates from the 50th percentile to the 30th, along with freezes, made many rental properties less affordable, increasing child poverty.
Currently, around 440,000 households with children are unable to cover rent with housing support.
Without a rise in LHA rates by April 2025, another 90,000 families could face this problem by March 2026, affecting 925,000 children overall.
As rents climb and support remains unchanged, families will need to find other means to pay rent, leaving them financially worse despite potential benefit increases in April.
The number of children renting privately has jumped from one in 12 to one in five over two decades.
There’s a significant difference in LHA rates across regions, with over 62% of Welsh families in private rentals face a shortfall, compared to just 31% in Scotland.
The disparity is sharper between local authorities, with 74% affected in Neath Port Talbot compared to 9% in East Lothian.
The report also highlights a social housing shortage, worsened since right-to-buy started in 1979, with waiting lists now at a 10-year high of 1.33 million.
Social housing benefits families by fully covering housing costs and providing permanent homes.
The state spends £32bn annually on housing support, much of which goes to private landlords.
IPPR modelling suggests shifting families in need to social housing could save £3bn yearly on benefits and reduce poverty for 200,000 people.
Although building costs would rise, it would lower expenses on temporary private accommodations.
Among proposed solutions, IPPR recommends updating LHA rates to the 30th percentile of rents and removing the household benefit cap from April 2025, eventually aiming for the 50th percentile.
They also suggest locking in annual LHA increases, establishing a new English housing tribunal to uphold renter rights, and building 100,000 social homes each year for 20 years.
Henry Parkes, principal economist at IPPR and author of the report, said: “A safe, secure, and affordable home should be the foundation for every child’s future.
“Instead, too many families are trapped in a cycle of poverty and instability caused by unaffordable rents and insecure tenancies.
“Housing reform isn’t just a moral imperative—it’s an economic necessity.”
