How Does the Local Housing Allowance System Work? What do 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.
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.)
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.
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.
To find out more about this or any other aspect of property investment or buy to let ask us at www.lettingfocus.com
I’m, David Lawrenson, the author of “Successful Property Letting – How to Make Money in Buy to Let” the UK’s top selling buy to let book and which has also been Amazon.co.uk’s top selling property title for the last 6 months.Read more of my property investment expert views and details of my networking, advice, telephone consultancy and property investment consultancy and seminar programme on my website www.lettingfocus.com.
Remember, what’s unique about lettingfocus.com is that we are unbiased and independent, because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and nor do not receive commissions from any of these sources.
If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad.
Copyright: David Lawrenson 2007. This blog is updated about three times a week
To read archived blogs select a date from the list at the right. To read recent ones, just page down.

How to Find Help to Solve Problems With Your Lease and Leasehold

We are back from our short summer break and keen to crack on with helping solve your property problems.
Today we will have a look at how new help is finally on the way for the thousands of people who have problems with leasehold flats.
If you own a flat and want to extend your lease or buy the freehold, your first point of call is probably to go and look it up on Google.
If you do, you will find lots of solicitors, surveyors and specialist enfranchisement companies that can handle part of the process (or in a few cases, the whole process) and will be anxious to help.
But how do you know if these firms have the necessary skills or track record?
Sadly, in the information vacuum that exists today, the business of enfranchising or extending a lease has quite few rogues.
For example, one company will tell you for £75 if the block is available for enfranchisement -something you can find out for free by doing a bit of research.
The fact is that it’s all too easy to mess up the actual work if you don’t know what you are doing or you employ an “expert” who is not fully up to speed with legislation.
Non-specialist solicitors can easily muck up a project causing long delays and adding huge extra costs for the owners. For example, the legal conditions have been amended several times recently. Take the residency test, for example. Whilst many solicitors will know that homeowners needed to have owned their flat for two years before exercising their right to extend the lease by 90 years, many don’t know that the owner now does not actually still need to be in residence (this followed a 2002 revision of the law which allowed buy-to-let investors to use this legislation to extend a lease.)
So it’s good news that a new body called ALEP (the Association of Leasehold Enfranchisement Practioners) has been set up to bring together a powerful group of solicitors, surveyors and intermediaries to impose some discipline on the industry. The hope is that their members will be scrupulously objective in helping homeowners to decide for themselves which is the best route to go down.
Another good point of call you should use is the government sponsored Leasehold Advisory Service. My own book, “Successful Property Letting – How to Make Money in Buy to Let” has a useful section on leasehold and I can also heartily recommend you read the Flat Owners Guide by Paul Walentowicz and published by Shelter – a superbly detailed guide to everything you could possibly want to know about managing agents, freeholders duties, extending leases, commonhold companies, the right to buy your share of freehold, exercising the right to manage and how to out inefficient or greedy freeholders.
If you have any queries about property investment and buy to let I can help. I’m David Lawrenson of Letting Focus - the author of “Successful Property Letting – How to Make Money in Buy to Let” the UK’s top selling buy to let book and which has also been Amazon.co.uk’s top selling property title for the last 6 months.
I’m a speaker, a contributor to newspapers and a host of property websites, write a property investment blog and am a media commentator on the residential property market.
You can find out more about my property investment insights and details of my networking, advice, telephone consultancy and property investment seminar programme and property consultancy programme at http://www.lettingfocus.com/
My blog is at http://www.lettingfocus.com/blog/blog.html
What’s unique about lettingfocus.com is that we are unbiased and independent, because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad.
Copyright: David Lawrenson 2007. This blog is updated about three times a week.
Read archived blogs by selecting a date from the list at the right. To read recent ones just page down.