In a letter to UK Housing Secretary Steve Reed OBE MP, McAllan said she was “deeply disappointed” by the UK Budget announcement confirming that LHA rates will remain frozen into 2026–27 — the second consecutive year of no uplift and the third year since rates were last increased.

Ms McAllan said the freeze is increasingly out of step with rising private rents, making it harder for low‑income households to access or sustain tenancies.

According to Scottish Government analysis, 87 of Scotland’s 90 LHA rates will fall below the 30th percentile of local market rents by 2026–27. Up to 45,000 households — including around 31,000 children — are expected to be adversely affected.

She highlighted UK‑wide research from the Joseph Rowntree Foundation showing that around half of households receiving housing support are already living below the poverty line.

“At a time of continued high rents, this decision makes it harder for low-income households to access and sustain tenancies in the private rented sector,” McAllan wrote. “This is deeply worrying for private rented sector tenants who rely on housing support to keep a roof over their heads.”

The Scottish Government has increased funding for Discretionary Housing Payments to mitigate the impact, but McAllan said UK-level decisions on LHA “limit our ability to prevent homelessness and tackle child poverty”.

She urged the UK Government to commit to uprating LHA so that it permanently meets at least the 30th percentile of local rents, arguing that doing so would “provide greater certainty for tenants, reduce pressure on homelessness services and support wider efforts to prevent poverty”.

Ms McAllan also raised concerns about the Housing Benefit subsidy system for temporary accommodation, which reimburses councils at 90% of the 2011 LHA rate — a figure that has been frozen for nearly 15 years despite steep increases in the cost of providing temporary accommodation.

She said the outdated subsidy level is “placing an unfair burden on local authorities” and undermining their ability to meet statutory duties. She urged Reed to agree to a review to ensure funding reflects the true cost to councils.

Propertymark, the professional body for property agents, echoed the housing secretary’s concerns, warning that the continued freeze will deepen the affordability crisis facing renters.

Timothy Douglas, head of policy and campaigns, said the gap between LHA and real rents is becoming increasingly unsustainable.

“The longer the UK Government continues to freeze LHA, the greater the gap becomes between support and actual housing costs,” he said. “Freezing LHA for 2026/27 will only exacerbate the affordability crisis facing many renters, pushing some further into financial hardship.”

Douglas said rising regulatory and financial pressures on landlords, combined with a persistent imbalance between supply and demand, are continuing to drive rents up across the UK.

“Keeping LHA rates frozen widens the shortfall between housing support and real rents, increasing the risk of homelessness and placing additional strain on already stretched local services,” he added.

Propertymark reiterated its position that LHA should be set at a minimum of the 30th percentile of local rents — and ideally the 50th — to give renters a realistic chance of securing and maintaining a home.

Ms McAllan welcomed the UK Government’s Autumn Budget commitment to introduce new earned‑income disregards in Housing Benefit for people in supported housing and temporary accommodation. However, she asked for further detail on eligibility, implementation and timing.

She said she would “appreciate the opportunity” to discuss the issues further, stressing that both governments share an ambition to prevent homelessness and protect children and families from poverty.