Nearly 1 Million UK Kids Face Financial Hardship as Rent Costs Surge

The increasing cost of rent in the UK is causing financial difficulties for many families, especially those with children.

A recent study by the Institute for Public Policy Research (IPPR) warns that nearly one million children could face financial hardship by 2026 due to rising rents and lack of government housing support.

Many families are struggling to pay rent while also covering essential needs like food, electricity, and healthcare. Let’s take a deeper look at the crisis, its causes, and possible solutions.

Why Are UK Families Struggling to Pay Rent?

1. Local Housing Allowance (LHA) Is Not Keeping Up With Rent Increases

The Local Housing Allowance (LHA) is a government program that helps low-income families cover rent in private housing. However, LHA rates have not been updated since 2011, while rental prices have continued to rise. This means many families are paying more rent than the government assistance covers. As a result, they are forced to use money from their Universal Credit and other benefits to pay rent, leaving them with less for food and other necessities.

2. Social Housing Shortage

The UK has a serious shortage of social housing—affordable homes provided by local councils or housing associations. Over the last 20 years, the number of children living in private rental homes has increased from 1 in 12 to 1 in 5. This means more families rely on private landlords, where rent prices are much higher. Without enough social housing, families have no choice but to live in expensive rental properties.

3. More Families Are at Risk of Homelessness

With rents increasing faster than wages and benefits, more families are struggling to afford housing. A growing number of households are being forced to make tough decisions—choosing between paying rent or buying food. Some families are even at risk of becoming homeless due to their inability to pay rent.

How Does This Crisis Affect Children?

Children living in financial hardship often experience:

• Poor Nutrition – Families struggling to pay rent may not have enough money left to buy healthy food, leading to malnutrition.
• Education Struggles – Financial stress can affect children’s ability to focus on schoolwork. Some may even miss school due to housing instability.
• Health Issues – Living in cold or overcrowded housing can lead to health problems, including respiratory illnesses.
• Emotional Stress – Constant worry about housing and money can cause anxiety and depression in children.

Experts warn that without urgent action, the number of children facing these challenges will continue to rise.

Regional Differences in the Housing Crisis

The housing crisis is not the same across the UK. The impact of rising rents varies by region:

• Wales: Nearly two-thirds of private renters struggle to afford rent.
• Scotland: The situation is slightly better, with only 31% of private renters facing difficulties.
• England: Rent increases have been especially high in major cities like London, Manchester, and Birmingham, putting pressure on low-income families.

This data highlights the urgent need for regional government action to address rising rents and the lack of affordable housing.

What Is the Government Doing to Help?

The UK government has introduced several programs to help struggling families, including:

1. Household Support Fund (HSF) – Provides financial assistance for food and energy bills.
2. Discretionary Housing Payments (DHPs) – Extra help for people struggling with rent.
3. Increase in National Living Wage – Raising wages to help people cope with rising costs.

However, many experts believe these measures are not enough. They argue that housing policy changes are needed to prevent further financial hardship.

Possible Solutions to the Housing Crisis

Housing experts and economists suggest several long-term solutions to help families and reduce child poverty:

1. Increase Local Housing Allowance (LHA)

The government should update LHA rates to reflect current rent prices. This would reduce the gap between rent costs and housing benefits, making it easier for families to afford homes.

2. Build More Social Housing

A massive investment in social housing could provide affordable homes for low-income families. This would reduce dependence on expensive private rentals and lower the need for housing benefits.

3. Rent Controls and Tenant Protections

Some experts suggest the government should limit how much landlords can increase rent each year. Rent control policies could prevent families from being forced out of their homes due to sudden rent hikes.

4. Support for Homeless Families

More funding should be allocated to help families facing homelessness by providing temporary accommodation and long-term housing solutions.

Will the New Labour Government Take Action?

The newly elected Labour government has not yet confirmed whether it will lift the LHA freeze in April 2025. Many families are waiting for policy changes, hoping for increased housing support. If action is not taken soon, more children will face poverty and housing insecurity in the coming years.

Final Thoughts

The rising cost of rent in the UK is pushing nearly one million children into financial hardship. Families are struggling to pay rent, and government assistance is not keeping up with the increasing cost of living.

Without urgent policy changes—such as raising LHA rates, building more social housing, and introducing rent controls—many families will continue to suffer.

The government must act quickly and effectively to prevent more children from experiencing poverty, hunger, and homelessness.

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