The UK government is being urged to allocate £6 billion in the upcoming Budget to help tackle a worsening housing affordability crisis, according to a report from the Resolution Foundation, an independent think tank focused on economic inequality. The report highlights that over 1.1 million low-income renters are struggling with what it calls a “cost of housing crunch,” as the difference between the amount they receive in housing benefits and the actual rent they must pay has reached record levels. This growing disparity has left many unable to afford basic living costs. A key factor in this crisis is the Local Housing Allowance (LHA), a government payment that determines how much housing benefit a person can receive. Since April 2024, LHA rates have been frozen, even as private rents have continued to rise. The Resolution Foundation predicts that by October, the gap between LHA rates and what is considered an "affordable" rent will be 23.3 per cent. This is expected to rise to 30 per cent by early 2028, leaving renters with a monthly shortfall of around £200 in London and £100 elsewhere in the UK. Research from Citizens Advice and Crisis, two charities that support people in financial difficulty, shows that only 2 per cent of UK properties are affordable for those relying on housing benefits. Over half of working-age adults in private rented accommodation who receive housing support experienced material deprivation in the 2024/25 financial year. This includes being unable to afford basic necessities such as heating and regular meals. The Resolution Foundation has addressed concerns that adjusting LHA rates could lead to higher rents, noting that when the allowance was last updated in April 2024, rent increases were minimal—just 10p for every additional pound of support. This change helped reduce the number of households struggling with rent shortfalls by over 150,000. Stephen Hunsaker, an economist at the Resolution Foundation, warned that failing to update LHA rates in the upcoming Budget could keep the freeze in place for another year, potentially increasing the gap to 30 per cent by March 2028. The think tank is calling for £2 billion to be spent annually on relinking LHA to local market rents, totaling £6 billion by 2029/30. This aligns with the views of housing campaigners, who argue the current policy worsens the crisis and increases the risk of homelessness. Mairi MacRae, director of policy and campaigns at Shelter, a housing charity, said families are forced to choose between feeding their children and paying rent, with many stuck in temporary accommodation due to the lack of affordable housing. The government has not yet commented on the report.