Local Housing Allowance - How Does It Work? What Landlords Need to Know
As Local Housing Allowance (LHA) is being rolled out across the UK, it is important for landlords who let to tenants on benefits, to understand how it works.
LHA is a government reform to supposedly make the housing benefit system work better and it’s being rolled out across the UK.
It is a flat rate benefit for private tenants that’s based on what the tenant and their family needs in terms of size of accommodation and it is calculated according to the number of people in the family and location.
Under the system, the tenant can choose a home with a higher rent and make up the shortfall or pay a lower rent and keep the difference. According to the government, giving the tenant this choice encourages and engenders financial responsibility. However, many landlords are sceptical this will work in practice especially with the more vulnerable tenants.
What will a Tenant Get on LHA?
It’s possible for a landlord to find out what tenants will receive because this depends on size of property (which is linked to size of family) and because average rent values for different sized properties in the local “Broad Rental Market Area” or BRMA are worked out by the Rent Service. You can easily find out the rent for any area by simply calling the Housing Department of your local authority.
Unfortunately, the Allowance is normally paid to the tenant (unlike the old Housing Benefit which could in most cases be paid straight to the landlord.)
Can LHA Be Paid Direct?
Only if the tenants is classed as vulnerable can the landlord be paid direct – examples might be people with learning difficulties, lack of English, debt, alcohol, drug or gambling problems.
Other bodies such as social services and doctors may also suggest to the local authority that the tenant is vulnerable and landlords with possibly vulnerable tenants should encourage the tenant to get letter in support of such a classification – the benefit being that the landlord will then be paid direct!
The local authority does not normally advise the landlord when a payment has been made so it’s good practice to check directly with the authority’s Housing Benefit section if a cheque or other payment was expected but has not been received.
If arrears amount to over 8 weeks the Local Housing Allowance can be paid direct to the landlord and landlords should report to the local authority any arrears of rent as soon as they emerge.
Change in Tenants Circumstances
Landlords must inform the local authority if there has been a change in the tenants’ circumstances and it is an offence not to do so. This was the case also under the old Housing Benefit system but seems to be being enforced more strictly now.
However, under Local Housing Allowance there is now no right to the local authority to claw back LHA paid to the tenant if it later turns out that the tenant has been acting fraudulently in receiving the Allowance.
Landlords should tell the local authority if the rent has gone up or down, if the tenant moves out (even if the tenancy has not ended), if the number of people in the property has changed or any other changes that may affect the tenants’ entitlement.
Finally, it’s always worth landlords getting the tenant to give the local authority permission to discuss the claim with the landlord, so you are kept in the information loop and can progress claims.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
LettingFocus.com are the buy to let experts and I’m David Lawrenson, the author of “Successful Property Letting” – which has been the UK’s top selling property and buy to let book for the last 3 years.
We help landlords and property investors make money in property by coaching them in ways that work and which are of minimal risk.
I have been a landlord and property investor myself for over 25 years.
At LettingFocus we offer independent unbiased advice for landlords and property investors on a one to one mentoring and coaching basis as well as through occasional group seminars.
You should know that property clubs and property advice in the UK is still mainly unregulated and advice is often poor.
With no link to property firms, developers or bridging loan providers we at LettingFocus can give unbiased independent advice on where and what type of property to buy for investment, when to buy and how to buy property at a low price.
We also show you how to manage tenants properly and in ways that take up as little of your time as possible.
CHECK OUT THESE PAGES AT OUR SITE LETTINGFOCUS.COM:
THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS on a range of products for landlords too, click here including landlords insurance, tenant referencing, tenancy agreements and more: Services and Products for Landlords
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
ONE TO ONE PRIVATE CONSULTING click here: Property Mentoring
CLIENT TESTIMONIALS from past customers click here: Testimonials
BUY THE BOOK click here: Buy the Book at Amazon
To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com - Please note we WILL NOT send spam or sell our mailing list to advertisers!
IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR OUR WEBSITE?
Selling services to landlords and property investors and have a national coverage? You could be a partner, please get in touch!
Copyright: David Lawrenson 2007. This blog is updated every week
To read archived blogs select a date from the list at the right. To read recent ones, just page down.
Have you seen this related article at our Articles pages: Local Housing Allowance and Tenants
Also, click on the Categories below for more on these topics.
LHA is a government reform to supposedly make the housing benefit system work better and it’s being rolled out across the UK.
It is a flat rate benefit for private tenants that’s based on what the tenant and their family needs in terms of size of accommodation and it is calculated according to the number of people in the family and location.
Under the system, the tenant can choose a home with a higher rent and make up the shortfall or pay a lower rent and keep the difference. According to the government, giving the tenant this choice encourages and engenders financial responsibility. However, many landlords are sceptical this will work in practice especially with the more vulnerable tenants.
What will a Tenant Get on LHA?
It’s possible for a landlord to find out what tenants will receive because this depends on size of property (which is linked to size of family) and because average rent values for different sized properties in the local “Broad Rental Market Area” or BRMA are worked out by the Rent Service. You can easily find out the rent for any area by simply calling the Housing Department of your local authority.
Unfortunately, the Allowance is normally paid to the tenant (unlike the old Housing Benefit which could in most cases be paid straight to the landlord.)
Can LHA Be Paid Direct?
Only if the tenants is classed as vulnerable can the landlord be paid direct – examples might be people with learning difficulties, lack of English, debt, alcohol, drug or gambling problems.
Other bodies such as social services and doctors may also suggest to the local authority that the tenant is vulnerable and landlords with possibly vulnerable tenants should encourage the tenant to get letter in support of such a classification – the benefit being that the landlord will then be paid direct!
The local authority does not normally advise the landlord when a payment has been made so it’s good practice to check directly with the authority’s Housing Benefit section if a cheque or other payment was expected but has not been received.
If arrears amount to over 8 weeks the Local Housing Allowance can be paid direct to the landlord and landlords should report to the local authority any arrears of rent as soon as they emerge.
Change in Tenants Circumstances
Landlords must inform the local authority if there has been a change in the tenants’ circumstances and it is an offence not to do so. This was the case also under the old Housing Benefit system but seems to be being enforced more strictly now.
However, under Local Housing Allowance there is now no right to the local authority to claw back LHA paid to the tenant if it later turns out that the tenant has been acting fraudulently in receiving the Allowance.
Landlords should tell the local authority if the rent has gone up or down, if the tenant moves out (even if the tenancy has not ended), if the number of people in the property has changed or any other changes that may affect the tenants’ entitlement.
Finally, it’s always worth landlords getting the tenant to give the local authority permission to discuss the claim with the landlord, so you are kept in the information loop and can progress claims.
ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
LettingFocus.com are the buy to let experts and I’m David Lawrenson, the author of “Successful Property Letting” – which has been the UK’s top selling property and buy to let book for the last 3 years.
We help landlords and property investors make money in property by coaching them in ways that work and which are of minimal risk.
I have been a landlord and property investor myself for over 25 years.
At LettingFocus we offer independent unbiased advice for landlords and property investors on a one to one mentoring and coaching basis as well as through occasional group seminars.
You should know that property clubs and property advice in the UK is still mainly unregulated and advice is often poor.
With no link to property firms, developers or bridging loan providers we at LettingFocus can give unbiased independent advice on where and what type of property to buy for investment, when to buy and how to buy property at a low price.
We also show you how to manage tenants properly and in ways that take up as little of your time as possible.
CHECK OUT THESE PAGES AT OUR SITE LETTINGFOCUS.COM:
THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS on a range of products for landlords too, click here including landlords insurance, tenant referencing, tenancy agreements and more: Services and Products for Landlords
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
ONE TO ONE PRIVATE CONSULTING click here: Property Mentoring
CLIENT TESTIMONIALS from past customers click here: Testimonials
BUY THE BOOK click here: Buy the Book at Amazon
To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com - Please note we WILL NOT send spam or sell our mailing list to advertisers!
IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR OUR WEBSITE?
Selling services to landlords and property investors and have a national coverage? You could be a partner, please get in touch!
Copyright: David Lawrenson 2007. This blog is updated every week
To read archived blogs select a date from the list at the right. To read recent ones, just page down.
Have you seen this related article at our Articles pages: Local Housing Allowance and Tenants
Also, click on the Categories below for more on these topics.
Labels: housing benefit, LHA, Local Housing Allowance, Local Letting Agency
This entry was posted by lettingfocus, on
Thursday, August 09, 2007.
