Chapter 4: Framing an allocation scheme
Source: gov.uk (2025-07-10)

Guidance on framing an allocation scheme, determining priorities, and providing for applicant choice and preferences.

4.1 Housing authorities are required by section 166A(1) (http://www.legislation.gov.uk/ukpga/1996/52/section/166A) to have an allocation scheme for determining priorities, and for defining the procedures to be followed in allocating housing accommodation; and they must allocate in accordance with that scheme (section 166A(14) (http://www.legislation.gov.uk/ukpga/1996/52/section/166A)). All aspects of the allocation process must be covered in the scheme, including the people by whom decisions are taken. In the Secretary of State’s view, qualification criteria form part of an allocation scheme.

4.2 All housing authorities must have an allocation scheme, regardless of whether they own housing stock and whether they contract out the delivery of any of their allocation functions (see chapter 6 (chapter-6-private-registered-providers-and-contracting-out)). When framing or modifying their scheme, authorities must have regard to their current tenancy and homelessness strategies (section 166A(12) (http://www.legislation.gov.uk/ukpga/1996/52/section/166A)).

Choice and preference options

4.3 An allocation scheme must include a statement as to the housing authority’s policy on offering people a choice of accommodation or the opportunity to express preferences about the accommodation to be allocated to them (section 166A (http://www.legislation.gov.uk/ukpga/1996/52/section/166A)). It is for housing authorities to determine their policy on providing choice or the ability to express preferences.

Reasonable preference

4.4 In framing their allocation scheme to determine allocation priorities, housing authorities must ensure that reasonable preference is given to the following categories of people (section 166A(3) (http://www.legislation.gov.uk/ukpga/1996/52/section/166A)):

(a) people who are homeless within the meaning of Part 7 of the 1996 Act (http://www.legislation.gov.uk/ukpga/1996/52/part/VII) (including those who are intentionally homeless and those not in priority need)

(b) people who are owed a duty by any housing authority under section 190(2), 193(2) or 195(2) of the 1996 Act (http://www.legislation.gov.uk/ukpga/1996/52/part/VII/crossheading/duties-to-persons-found-to-be-homeless-or-threatened-with-homelessness) (or under section 65(2) or 68(2) of the Housing Act 1985) or who are occupying accommodation secured by any housing authority under section 192(3) 11 (#footnote11)

(c) people occupying insanitary or overcrowded housing or otherwise living in unsatisfactory housing conditions

(d) people who need to move on medical or welfare grounds, including grounds relating to a disability 12 (#footnote12) , and

(e) people who need to move to a particular locality in the district of the housing authority, where failure to meet that need would cause hardship (to themselves or others)

4.5 In framing their allocation scheme to give effect to section 166A(3) (http://www.legislation.gov.uk/ukpga/1996/52/section/166A), housing authorities should have regard to the following considerations:

the scheme must be framed so as to give reasonable preference to applicants who fall within the categories set out in section 166A(3), over those who do not

although there is no requirement to give equal weight to each of the reasonable preference categories, authorities will need to demonstrate that, overall, reasonable preference has been given to all of them

there is no requirement for housing authorities to frame their scheme to afford greater priority to applicants who fall within more than one reasonable preference category (cumulative preference) over those who have reasonable preference on a single, non-urgent basis 13 (#footnote13) . Otherwise, it is for housing authorities to decide how to give effect to the provisions of section 166A(3) in their allocation scheme.

Restricted persons

4.6 Applicants should not be given reasonable preference under paragraph (a) or (b) of section 166A(3) (http://www.legislation.gov.uk/ukpga/1996/52/section/166A) if they would only qualify for reasonable preference by taking into account a ‘restricted person’ within the meaning of Part 7 (section 166A(4)). A restricted person is a person subject to immigration control who is not eligible for homelessness assistance because he or she does not have leave to enter or remain in the UK or has leave which is subject to a ‘no recourse to public funds’ condition (section 184(7) of the 1996 Act (http://www.legislation.gov.uk/ukpga/1996/52/section/184)).

Homeless or owed a homelessness duty

4.7 The requirement for housing authorities to frame their allocation scheme to give reasonable preference to people who are owed certain homeless duties remains the case, notwithstanding the amendments to Part 7 made by the Localism Act which give authorities the power to end the main homelessness duty with an offer of private rented accommodation, without requiring the applicant’s consent 14 (#footnote14) .

Overcrowding

4.8 The Secretary of State takes the view that the bedroom standard is an appropriate measure of overcrowding for allocation purposes, and recommends that all housing authorities should adopt this as a minimum. The bedroom standard allocates a separate bedroom to each:
- married or cohabiting couple
- adult aged 21 years or more
- pair of adolescents aged 10-20 years of the same sex
- pair of children aged under 10 years regardless of sex
Medical and welfare grounds

4.9 The medical and welfare reasonable preference category includes people who need to move because of their disability or access needs, and this includes people with a learning disability as well as those with a physical disability 15 (#footnote15) .

4.10 ’Welfare grounds’ would encompass a wide range of needs, including, but not limited to, the need to:

provide a secure base from which a care leaver, or a person who is moving on from a drug or alcohol recovery programme, can build a stable life

provide accommodation, with appropriate care and support, for those who could not be expected to find their own accommodation, such as young adults with learning disabilities who wish to live independently in the community

provide or receive care or support. This would include foster carers, those approved to adopt, or those being assessed for approval to foster or adopt, who need to move to a larger home in order to accommodate a looked after child or a child who was previously looked after by a local authority. It would also include special guardians, holders of a residence order and family and friends carers who are not foster carers but who have taken on the care of a child because the parents are unable to provide care

Hardship grounds

4.11 This would include, for example, a person who needs to move to a different locality in order to give or receive care, to access specialised medical treatment, or to take up a particular employment, education or training opportunity.

4.12 Possible indicators of the criteria which apply to reasonable preference categories (c) and (d) are given in annex 1 (annex-1-indicators-of-criteria-in-reasonable-preference-categories-c-d).

Additional preference

4.13 Section 166A(3) (http://www.legislation.gov.uk/ukpga/1996/52/section/166A) gives housing authorities the power to frame their allocation scheme to give additional preference to particular descriptions of people who fall within the statutory reasonable preference categories and have urgent housing needs, and they must do so for members of the Armed and Reserve Forces (see paragraph 4.14). All housing authorities must consider, in the light of local circumstances, the need to give effect to this provision. Examples of people with urgent housing needs to whom housing authorities should consider giving additional preference within their allocation scheme include:

those who need to move urgently because of a life threatening illness or sudden disability

families in severe overcrowding which poses a serious health hazard

those who are homeless and require urgent re-housing as a result of violence or threats of violence, including intimidated witnesses, and those escaping serious anti-social behaviour or domestic violence

Members of the Armed and Reserve Forces

4.14 Housing authorities must frame their allocation scheme to give additional preference to the following categories of people who fall within one or more of the reasonable preference categories and who have urgent housing needs (section 166A(3)) 16 (#footnote16) :
- (a) former members of the Armed Forces
- (b) serving members of the Armed Forces who need to move because of a serious injury, medical condition or disability sustained as a result of their service
- (c) bereaved spouses and civil partners of members of the Armed Forces leaving Services Family Accommodation following the death of their spouse or partner
- (d) serving or former members of the Reserve Forces who need to move because of a serious injury, medical condition or disability sustained as a result of their service
Determining priorities between households with a similar level of need

4.15 Authorities may frame their allocation scheme to take into account factors in determining relative priorities between applicants in the reasonable (or additional) preference categories (section 166A(5) (http://www.legislation.gov.uk/ukpga/1996/52/section/166A)). Examples of such factors are given in the legislation: financial resources, behaviour and local connection. However, these examples are not exclusive and authorities may take into account other factors instead or as well as these.

Financial resources available to a person to meet his housing costs

4.16 This would enable a housing authority, for example, to give less priority to owner occupiers (wherever the property is situated).

Behaviour

4.17 This would allow for greater priority to be given to applicants who have been model tenants or have benefited the community, for example.

Local connection

4.18 Local connection is defined by section 199 of the 1996 Act (http://www.legislation.gov.uk/ukpga/1996/52/section/199). A person has a local connection because of normal residence (current or previous) of their own choice, employment, family associations, or special circumstances. Residence is not of a person’s choice if it is the consequence of being detained in prison or in hospital under the Mental Health Act. As a result of changes to section 199 introduced in 2008 17 (#footnote17) a person serving in the Armed Forces can establish a local connection with a local authority district through residence or employment there, in the same way as a civilian.

Care leavers

4.19 Local authorities should also take into account the needs of all care leavers living in their area (independent of which local authority is responsible for them) when framing their allocation schemes, and in particular those who are placed in their area but were looked after by another local authority and those that have been separated from important family or social relationships. Authorities are strongly encouraged to give the same level of priority to those care leavers who have been placed in their authority area and wish to stay, as their own care leavers whom they have a duty to provide support and assistance up to age 25.

4.20 Care leavers who have been placed in a different area while in care may have created important support networks in that time which are likely to replace the family support that others have. Care leavers are also more likely to be victims of abuse or exploitation and may have been placed in the area for safeguarding reasons.

4.21 Authorities should also consider extending similar priority to care leavers who have a close family or social connection within an area.

4.22 The local authority who held responsibility for the young person will need to ensure that continued leaving care support is provided under the provision in the Children Act 1989 requiring responsible authorities to continue to support care leavers. It should be encouraged by both local authorities that the care leaver remain in contact with their responsible authority. This contact should take place as specified in their pathway plan and at least within the specified intervals.

Joint working on care leavers and victims of domestic abuse

4.23 Given the uneven distribution of placements for looked after children (including children’s homes, supported accommodation and foster placements) and domestic abuse safe accommodation (such as refuges) across local housing authorities, we would encourage housing authorities to consider the scope for working together with other authorities, taking into account the needs and preferences of care leavers, domestic abuse victims and their families, to ensure that any increased pressure on social housing does not fall disproportionately on those authorities with children’s care homes or domestic abuse safe accommodation provision.

Including local priorities alongside the statutory reasonable preference categories

4.24 As the House of Lords made clear in the case of R (on application of Ahmad) v. Newham LBC 18 (#footnote18) , section 166A(3) 19 (#footnote19) only requires that the people encompassed within that section are given ‘reasonable preference’. It ‘does not require that they should be given absolute priority over everyone else’ 20 (#footnote20) . This means that an allocation scheme may provide for other factors than those set out in section 166A(3) to be taken into account in determining which applicants are to be given preference under a scheme, provided that:
- they do not dominate the scheme, and
- overall, the scheme operates to give reasonable preference to those in the statutory reasonable preference categories over those who are not
4.25 The Secretary of State would encourage authorities to consider the scope to take advantage of this flexibility to meet local needs and local priorities.

4.26 The House of Lords also made clear that, where an allocation scheme complies with the reasonable preference requirements and any other statutory requirements, the courts should be very slow to interfere on the ground of alleged irrationality 21 (#footnote21) .

Local lettings policies

4.27 Section 166A(6)(b) of the 1996 Act (http://www.legislation.gov.uk/ukpga/1996/52/section/166A) enables housing authorities to allocate particular accommodation to people of a particular description, whether or not they fall within the reasonable preference categories, provided that overall the authority is able to demonstrate compliance with the requirements of section 166A(3). This is the statutory basis for so-called ‘local lettings policies’ which may be used to achieve a wide variety of housing management and policy objectives.

Households affected by the under-occupation measure

4.28 When framing the rules which determine the size of property to allocate to different households and in different circumstances, housing authorities are free to set their own criteria, provided they do not result in a household being statutorily overcrowded. However, in setting these criteria, authorities will want to take account of the provision in the Welfare Reform Act 2012 which reduces Housing Benefit to under-occupiers.

4.29 Social tenants affected by the under-occupation measure may choose to move to more suitably sized accommodation in the private rented sector. One way to encourage tenants to consider this option might be to ensure they are given some degree of preference for an allocation if they apply for a new social tenancy at a later date.

Members of the Armed Forces

4.30 Authorities are also strongly encouraged to take into account the needs of all serving or former Service personnel when framing their allocation schemes, and to give sympathetic consideration to the housing needs of family members of serving or former Service personnel who may themselves have been disadvantaged by the requirements of military service and, in particular, the need to move from base to base 22 (#footnote22) . This would be in line with terms of the government’s Armed Forces Covenant (https://www.armedforcescovenant.gov.uk/) published in May 2011.

4.31 Examples of ways in which authorities can ensure that Service personnel and their families are given appropriate priority, include:

using the flexibility within the allocation legislation to set local priorities alongside the statutory reasonable preference categories so as to give preference, for example, to those who have recently left, or are close to leaving, the Armed Forces 23 (#footnote23) (see paragraph 4.19 above)

using the power to determine priorities between applicants in the reasonable preference categories, so that applicants in housing need who have served in the Armed Forces are given greater priority for social housing over those who have not (see paragraph 4.15 above)

if taking into account an applicant’s financial resources in determining priorities between households with a similar level of need (see paragraph 4.16 above), disregarding any lump sum received by a member of the Armed Forces as compensation for an injury or disability sustained on active service

setting aside a proportion of properties for former members of the Armed Forces under a local lettings policy (see paragraph 4.21 above)

4.32 A number of organisations provide specialist housing and support for veterans, such as the Royal British Legion, Stoll, Haig Homes, Alabare and Norcare, and housing authorities are encouraged to liaise with them to ensure that former Service personnel are able to access the housing option which best suits their needs.

Households in work or seeking work

4.33 Local authorities are urged to consider how they can use their allocation policies to support those households who want to work, as well as those who – while unable to engage in paid employment – are contributing to their community in other ways, for example, through voluntary work. The flexibilities which authorities are encouraged to make use of to meet the needs of Service personnel would apply equally here. This might involve, for example, framing an allocation scheme to give some preference to households who are in low paid work or employment-related training, even where they are not in the reasonable preference categories; or to give greater priority to those households in the reasonable preference categories who are also in work or who can demonstrate that they are actively seeking work. Alternatively, it might involve using local lettings policies to ensure that specific properties, or a specified proportion of properties, are allocated to households in particular types of employment where, for example, skills are in short supply.

4.34 Authorities should also consider how best they can make use of the new power to offer flexible tenancies to support households who are in low paid work, and incentivise others to take up employment opportunities.

Carers

4.35 In making accommodation offers to applicants who receive support from carers who do not reside with them but may need to stay overnight, housing authorities should, wherever possible, take account of the applicant’s need for a spare bedroom.

Prospective adopters and foster carers

4.36 When considering housing applications from prospective foster carers or adopters who would require an extra bedroom to accommodate a foster or adoptive child, authorities will wish to weigh up the risk that the application to foster or adopt may be unsuccessful (leading to the property being under-occupied), against the wider benefits which would be realised if the placement was successful.

4.37 Children’s services have a duty under section 22G of the Children Act 1989 (http://www.legislation.gov.uk/ukpga/1989/41/section/22G) to ensure sufficient accommodation to meet the needs of the looked after children in their area. Authorities should work together with children’s services to best meet the needs of prospective and approved foster carers and adopters, so that children’s services can meet their section 22G duty. One way to strike an appropriate balance would be to set aside a quota of properties each year for people who need to move to larger accommodation in order to foster or adopt a child on the recommendation of children’s services.

4.38 The advice in paragraph 4.22 is particularly relevant in relation to prospective foster carers, as foster children are not taken into account in determining the household size for the purposes of the under-occupation measure in the Welfare Reform Act. However, current and prospective foster carers affected by the measure may be eligible to apply for a Discretionary Housing Payment.

General information about particular applications

4.39 Under section 166A(9) (http://www.legislation.gov.uk/ukpga/1996/52/section/166A), allocation schemes must be framed so as to give applicants the right to request from housing authorities general information that will enable them to assess:

(a) how their application is likely to be treated under the scheme and, in particular, whether they are likely to have reasonable preference

(b) whether accommodation appropriate to their needs is likely to be made available and, if so, how long it is likely to be before such accommodation becomes available

Notification about decisions and the right to a review of a decision

4.40 An allocation scheme must be framed so as to give applicants the right to be informed of certain decisions and the right to review certain decisions (section 166A(9) (http://www.legislation.gov.uk/ukpga/1996/52/section/166A)). For further advice on decisions and reviews, see chapter 5 (chapter-5-allocation-scheme-management).

Footnotes

(11) Sections 65(2) and 68(2) of the Housing Act 1985 and section 192(3) of the Housing Act 1996 have been repealed. ↩ (#note11)

(12) The words ‘including grounds relating to a disability were added by the Housing Act 2004. ↩ (#note11)

(13) (R (on application of Ahmad) v London Borough of Newham [2009] UKHL 14, [2009] HLR 31. ↩ (#note13)

(14) Housing authorities are referred to the statutory guidance Improving access to social housing for victims of domestic abuse (https://www.gov.uk/government/publications/improving-access-to-social-housing-for-victims-of-domestic-abuse) which advises that those who have fled domestic abuse and are currently living in refuges should usually be considered as homeless. ↩ (#note14)

(15) Housing authorities are referred to the statutory guidance Improving access to social housing for victims of domestic abuse (https://www.gov.uk/government/publications/improving-access-to-social-housing-for-victims-of-domestic-abuse) which strongly encourages authorities to apply the medical and welfare reasonable preference category to victims of domestic abuse and their families who have escaped domestic abuse and are being accommodated in a refuge or other temporary accommodation. ↩ (#note15)

(16) The Housing Act 1996 (Additional Preference for Armed Forces) (England) Regulations 2012 (https://www.legislation.gov.uk/uksi/2012/2989/contents/made) came into force on 30 November 2012. ↩ (#note16)

(17) Amendment to section 199 of the 1996 Act made by section 315 of the Housing and Regeneration Act 2008 (http://www.legislation.gov.uk/ukpga/2008/17/section/315). ↩ (#note17)

(18) [2009] UKHL 14. ↩ (#note18)

(19) Previously section 167(2), which continues to apply to allocations by housing authorities in Wales. ↩ (#note18)

(20) Baroness Hale at para [18]. ↩ (#note18)

(21) Lord Neuberger at para [55]. ↩ (#note21)

(22) Housing authorities are referred to the statutory guidance Improving access to social housing for members of the Armed Forces (https://www.gov.uk/government/publications/improving-access-to-social-housing-for-members-of-the-armed-forces/improving-access-to-social-housing-for-members-of-the-armed-forces) which was first published updated on 27 June 2020 and updated on 18 December 2024. ↩ (#note22)

(23) MoD issues a Certificate of Cessation of Entitlement to Occupy Service Living Accommodation 6 months before discharge. ↩ (#note23)