Private Rented Sector Access Schemes - Landlords Should Take a New Look At Letting to Tenants on Local Housing Allowance

I have to admit, I’m the original landlord who preferred my tenants NOT to be on Local Housing Allowance (the now not so new version of Housing Benefit.)
Many years ago I had a tenant hailing from Guadeloupe who was getting housing benefit. (Guadeloupe as a department of France, presumably qualified him for getting this! Not sure I would get my rent paid in Guadeloupe or even France for that matter, but let’s leave that one to the “Daily Mail” for now.)
His rent was paid in the end, but it was always late and altogether it was quite a bit of hassle.
The tenant also had an odd habit of going out and leaving the front door open, which, as you might imagine, was a bit annoying to people in the neighbouring flats.
After that experience, in future, I only let to tenants who are working and had incomes.
And that’s why many landlords shy clear of letting to Benefit Tenants - it’s the fear of non payment of rent, administrative delays at the Town Hall combined perhaps with other prejudices regarding how their property might be looked after by such tenants.
Now, some of these prejudices are unfair – there are many good Benefit Tenants who pay their rent dutifully on time every time.
And on average “Benefit Tenants” stay longer too.
But, the prejudices exist all the same.

LHA – Using Landlords as Guinea Pigs
But what really got landlords cross was the decision by the current Government to replace Housing Benefit with the new system of Local Housing Allowance (or LHA as it is sometimes called) for landlords.
This was rolled out nationally in 2008.
LHA brought in a different way of calculating what was paid out - which we have looked at in other blog posts - but the key difference as far as private landlords were concerned, was that unless the tenant was deemed vulnerable, or was in 8 weeks arrears, the LHA would always be paid to the tenant.
This was a big change from the Housing Benefit system where it could be paid to the landlord if the tenant preferred it that way (and many did).
Now this change only affected private landlords. The lucky old councils and housing associations would still be paid direct under the old system of Housing Benefit!
In other words, as my friend Tom Entwistle of LandlordZone eloquently put it, “the private rented sector was being used as a guinea pig.”
The idea behind the change was to give tenants more financial responsibility: “Let them manage their own budgets” said the Government, loftily (possibly in the style of the ill fated Marie Antoinette - when she was discussing bread and its availability.)

Result – Chaos and Arrears for Some Landlords…….
Well, what’s happened as a result?
Well, many tenants spent the money they got from LHA on something other than the rent.
The result was arrears have risen, landlords have exited this part of the market in droves and both landlords groups and the likes of Shelter and Crisis are calling for a change whereby those tenants who don’t trust their own budgeting skills can once again opt to have the money paid direct to the landlord.
I think this policy reversal could happen eventually even under the current government who brought the original change in. (The Conservatives have already said they would reinstate the right for tenants to elect that payments of their LHA can be made direct to landlords.)
In the meantime, is LHA really that bad?
I’m not so sure.

. …An Opportunity for Other Landlords
I have always known that some landlords specialise in letting to tenants on LHA, and that’s not always because they are letting in areas where the entire population is on benefits either.
So why do they do it?
What do they know that other landlords don’t?
Over the past year, through the consultancy work I do with the public sector with local authorities and housing associations, helping them to understand and attract private landlords though things called “Private Rented Sector Access Schemes”, “Local Letting Agency Models” and the like, I have been surprised by the extent and level of help on offer to private landlords who choose to let to tenant on LHA.
I knew help was there, I just hadn't grasped the extent of it.
It varies by local authority but in many areas there is money to pay you rent in advance, to pay and safeguard deposits and occasionally even landlords finders’ fees.
Plus there is lots of help and advice from the local authority too.

New Rules
Recently, new rules have cut the actual time a tenant can be in arrears before the authorities can pay landlords direct.
And the definition of “Vulnerability” which also triggers direct payments has been eased.
Landlords should look at this sector again, but to make it work for you, you do need to be like the landlords who already let in this sector - very, very clued up on how the LHA system works.
Oh, and you need to be in a place where the local authority is landlord friendly and efficient at processing those LHA claims.

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MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of landlord information.
I’m David Lawrenson, a landlord and property investor myself for over 25 years and author of “Successful Property Letting” – the UK’s top selling commercially published property book for the last 3 years.
I help private landlord investors (see more on this below) but these days I’m mainly a consultant to banks, local authorities, social housing providers and other organisations – helping them with their landlord facing or buy to let product strategies and services.
I also write for property websites and am regularly quoted by the media.
I have written articles, guides and documents on letting property and property investing for numerous publications including The Independent, The Telegraph and for quality landlord and property websites.

Services for Private Landlords
For private landlords and other investors in the private rented sector, we do two London seminars each year.
We also find some spare time to help landlords and property investors by coaching them in how to make money in the private rented sector using ways that work, which are ethical, fair to tenants and which involve minimal risk to the investor.
We pride ourselves on giving independent unbiased buy to let advice on either a one to one mentoring / coaching basis or through our occasional group seminars.
With no links to property firms, developers or bridging loan providers we can advise on where and what type of property to buy for investment and when to buy it. We also show you how to manage tenants properly.

AT OUR WEBSITE LETTINGFOCUS.COM:

THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
For general info on our CONSULTING click here: Consultancy and Seminars
ONE TO ONE PRIVATE CONSULTANCY click here: Property Mentoring
NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investment Seminar and Networking Event
We have OFFERS on a range of services and products for landlords too; click here including landlords insurance, tenant referencing, tenancy agreements and more: Services and Products for Landlords
TO READ CLIENT TESTIMONIALS – both commercial and private click here: Testimonials
BUY “SUCCESSFUL PROPERTY LETTING” click here: Buy the Book at Amazon plus anything else you fancy at Amazon.co.uk

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Housing Benefit and Shared Houses – More Pesky Government Meddling

Welcome to this weeks blog - a whole day early.
Well, the current government sure likes to meddle in the private rented sector - which, of course, keeps writers and consultants like me very busy indeed.
In the latest move, Housing and Planning Minister, John Healey MP has announced plans to tackle anti-social behaviour and property standards by requiring landlords to get planning permission before turning a property into an HMO or house in multiple occupation for the first time.
Also, they have announced plans to make it easier for local authorities to introduce licensing schemes.

Odd Move
The plans to require landlords to get planning permission before turning houses into HMOs, strikes me as rather odd because when the plans were first mooted they were rejected by a pretty broad lobby consisting of organisations as diverse as the National Union of Students and the British Property Federation.
The National Landlords Association said, “If the Government was really interested in dealing with anti-social behaviour and property standards in the small minority of places where they are an issue, they would have taken up the NLA's call for more targeted local management action by councils working with landlords in their areas.”
They went on to say that these measures could lead to “A 'nimbys charter', creating no-go areas for landlords, students, young professionals, low income families, migrant workers and a wide range of other groups who rely on private-sector shared housing.
I agree.

Not Enough Low Cost Housing
Surely, the government should "go back to the start" and look at why more people are living in shared houses.
And the answer is that as the population has grown faster than housing supply and there are just not enough houses for people to live in.
Doh!
And as we aren’t building enough low cost social housing, people who need a home are looking to the private rented sector to provide it.
“Simples!” as the Meerkat would say!

New LHA Arrears Guidelines
And of course, increasing numbers of tenants now get their private sector rent paid by housing benefits (or Local Housing Allowance as the new flavour is called.)
Still, there was one bit of good news on that front.
The government has just changed its Local Housing Allowance (LHA) guidance on rent arrears and payment to landlords.
Local authorities can now pay LHA direct to landlords when tenants are contractually 8-weeks in arrears, rather than waiting until 8 weeks have physically passed.
This change takes into account the situation when rent is due in advance.
So, it means most landlords (whose tenancy agreements require rent in advance) will only have to wait 4 weeks.

Housing Benefit and the Press
Of course, the likes of the more right leaning press (when they are not getting cross about inward migration and hook handed clerics) get themselves very worked up about the growing Housing Benefits bill.
Certainly from my experience the number of people of housing benefits has grown massively.
Indeed, in my patch it is hard to find any tenants whose rent is not paid via the Local Housing Allowance system.
This is all very different to 10 years ago.
Back then, 90% of my tenants were UK nationals with the remaining 10% from countries like Ireland and Aussie and the odd Frenchman and German. Nearly all were all paying their own rent (they were not on housing benefits)
Five years ago, mass inward migration really took hold and suddenly 90% of my tenants were new migrants from all points of the world. Again, all seemed to be working. None were on Housing Benefit.
Today, 90% of all the tenants I have applying for my latest property are overseas nationals with about 75% on Local Housing Allowance - for which it seems residency qualifications are minimal. Just don’t tell anyone at the Daily Mail!

Why Many Landlords Don’t Like Local Housing Allowance
Getting landlords to let to people on housing benefits is not easy (even if the payment in many areas is at least 10% above private sector rents).
Why, because quite a lot of landlords don’t like the fact that the monies are normally paid to tenants (not direct to landlords like in the old days unless they are in arrears as explained above) so there is the risk the tenants go and spend it on something else.
The Tories have pledged to reinstate tenants choice for immediate direct payments to landlords should they win the election.
As part of my consultancy work with housing associations and local government I work to help them get more landlords to let to people in receipt of LHA / Housing Benefit them.
As you can imagine, this consulting work is in demand.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of landlord information.

Hello, I’m David Lawrenson.
I have been a landlord and property investor myself for over 25 years and am author of “Successful Property Letting” – which has been the UK’s top selling commercially published property book for the last 3 years.
Our main business is at a corporate level for organisations - both public and private companies.
We provide consultancy for banks, local authorities, social housing providers and other organisations – helping them with their landlord facing or buy to let product strategies and services.

OTHER WORK
We also write for property websites and are regularly quoted by the media. In addition, we have written articles for numerous publications including The Independent, The Telegraph and quality landlord websites.

MENTORING
For private landlords, we also find some occasional spare time to help landlords and property investors make money in property by coaching them in ways that work, which are ethical and which involve minimal risk to the investor.
We pride ourselves on giving independent unbiased buy to let advice on either a one to one mentoring / coaching basis or through our occasional group seminars.
Unfortunately, in the UK today, property advice in the UK is still largely unregulated and what counts as “good advice” is too often more about making the promoter money than giving useful information to the investor.
With no links to property firms, developers or bridging loan providers we can advise on where and what type of property to buy for investment and when to buy it. We also show you how to manage tenants properly.

AT OUR WEBSITE LETTINGFOCUS.COM:

THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
For general info on our CONSULTING click here: Consultancy and Seminars
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NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investment Seminar and Networking Event
We have OFFERS on a range of services and products for landlords too; click here including landlords insurance, tenant referencing, tenancy agreements and more: Services and Products for Landlords
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BUY “SUCCESSFUL PROPERTY LETTING” click here: Buy the Book at Amazon plus anything else you fancy at Amazon.co.uk

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Predictions for 2010, ALL Change on Housing Benefit and the Pre Budget Report. News from LettingFocus

‘Tis the time of year to make predictions about house prices and the like.
As I have said before there are so many different micro markets in UK property market, it is more or less impossible to make a sweeping forecast about house prices which will apply in every locality.
However, my general view is that the story of increasing population / increasing number of households combined with a lack of housing supply is more important than the opposing factors constraining growth in property prices - like unemployment, debt and lack of mortgage finance.
And because of this I expect prices to increase overall in 2010.
However, there will undoubtedly be areas of the UK where local unemployment and business failures will mean house prices will fall.

Local Housing Allowance – All Change

The Conservatives have said they will reinstate direct rent payments to landlords (where housing benefit tenants choose it) if they should become the next Government.
And now the current Government has put it under review too.
Local Housing Allowance (LHA) came in for new tenancies in April 2008 when it replaced the old housing benefit system.
With the old system where rent could be paid straight to landlords in the private sector, it now goes direct to the tenants who are then responsible for passing on the rent money to their landlord. (Only in special circumstances like where the tenant is deemed vulnerable or if the payments to the landlord are over two months behind can rent be paid direct to the landlord – but even then it can take longer than two months before LHA is paid direct by some councils.)

Big Sums of Money

Faced with a big wodge of money which they are not used to having, some tenants spend the money on other things and often fail to make their rent payments - so increasing numbers of landlords are now refusing to let to tenants who are in receipt of Housing Benefit.
According to research from the National Landlords Association (NLA) of 1,000 landlords operating 13,000 LHA tenancies, the total rent arrears bill accumulated by these landlords since LHA started is a whopping £4,400 per landlord.
It is thought there are about 675,000 LHA tenancies which means that total rent arrears across the UK could be in excess of £220 million.

Temptation

It is claimed that many tenants would prefer not to be put in the way of temptation and would rather the LHA was paid direct to the landlord.
At LettingFocus.com, we have also been critical of the way the LHA is set – as it is based on very wide Broad Market Rental Areas.
This means that in some areas the rates of LHA are too high and in other areas they are too low – with knock on impacts for tenants who don’t qualify for LHA.
My old pal, Tom Entwistle of Landlord Zone has criticized the way landlords were used as guinea pigs in the current system - which does not apply to council tenants.
Check out the Government’s consultation document for more on this….…www.dwp.gov.uk/docs/hb-consultation.pdf

Pre Budget Report

No real news here.
Stamp Duty Land Tax went back to being applied for all properties over £125K
And there is so some money to replace old inefficient boilers – but not a lot – and we don’t know if it will be available for let properties yet.

Merry Christmas to all our readers.

ABOUT US

LettingFocus.com is the home of landlord information.

Hello, I’m David Lawrenson.
I have been a landlord and property investor myself for over 25 years and am 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, which are ethical and which involve minimal risk to the investor.
We pride ourselves on giving independent unbiased buy to let advice on a one to one mentoring and coaching basis as well as through occasional group seminars.
Unfortunately, in the UK today, property advice in the UK is still largely unregulated and what counts as “good advice” is too often more about making the promoter money than giving useful information to the investor.
With no links to property firms, developers or bridging loan providers we can advise on where and what type of property to buy for investment and when to buy it.
We also show you how to manage tenants properly.
We also do consultancy for banks, local authorities and social housing providers – helping them with their landlord facing or buy to let product strategies. We also write for property websites and are regularly quoted by the media.

AT OUR WEBSITE LETTINGFOCUS.COM:

THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
ONE TO ONE PRIVATE CONSULTANCY click here: Property Mentoring
NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investment Seminar and Networking Event
We have OFFERS on a range of services and 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
TO READ CLIENT TESTIMONIALS – both commercial and private click here: Testimonials
BUY “SUCCESSFUL PROPERTY LETTING” click here: Buy the Book at Amazon plus anything else you fancy at Amazon.co.uk

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Copyright of Blog: David Lawrenson 2009. This blog is updated roughly once a week usually on a Monday or Tuesday.

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Local Letting Agency and PRivate Rented Sector Access Schemes. Local Authorities Engage With Landlords by Letting Focus

One of the findings of the Rugg Review into the private rented sector was that local authorities should be actively encouraged to explore ways in which to “improve their engagement with private landlords” in their area.
Hooray, say many landlords.
The fact is that local authorities need landlords to house people on Local Housing Allowance (Housing Benefit) and whilst some councils have a negative view of landlords, some other local authorities actually do a very good job of trying to think of innovative ways to get landlords on board in such a way that the landlords worries about tenant default are reduced.
But even in the better local authorities, all too often, the ways and means that the councils have devised are not really what landlords want.

Understanding the Needs of Landlords
At LettingFocus we think we understand the needs of landlords.
As a landlord for over 20 years and the author of the UK’s best selling book on property – which happens to be all about the subject of letting from a landlord point of view - I do claim to have an understanding of what landlords actually need.
And since the Rugg Review was published a growing number of local authorities have found me via the internet and asked to consult with them and benefit from my advice on how to set up Local Letting Agency Models and Choice Based Lettings schemes so they can better engage with landlords and meet their needs.
I do find public sector employment / consulting contracts and the rather long winded process of being hired as a consultant by a local authority rather daunting - but it is fun and it is nice to do something which is for landlords and the social housing sector and which will, I hope, be to the benefit of all.

Local Housing Allowance Payments and Default
Of course one of the problems for local authorities is that the present government decided that Housing Benefit would in future (unless the tenant was classed as vulnerable or other special circumstances were in place) be paid to the tenants rather than direct to the landlord.
(This was to encourage tenants’ financial responsibility, since you ask.)
Paul Shamplina of Landlord Action at our seminar last night said that this move has led to a huge increase in his workload of evicting non paying tenants because all too often tenants spent the money on other things rather than hold it and pay the rent due to the landlord.
As a result, a large number of landlords have completely stopped letting to people on Housing Benefits.
The Conservatives have said they will, if elected; once more offer the option of having Housing Benefit paid direct to the landlord.

Housing Benefit Bill Growing
All the while, the bill for Housing Benefit is growing and lots of landlords are still be prepared to let to people on benefits, despite the higher default risk.
(They know that good Housing Benefit tenants tend to stay a long time and often make model tenants. The hard bit is finding such good tenants.)
With the continued growth of people on Housing Benefits, it is imperative that local authorities do all they can to make letting to people on benefits attractive to landlords.
Through my consultancy with RSLs and local authorities I can help them with this objective.

ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
We are LettingFocus.com - the landlords’ expert and I’m David Lawrenson, the author of “Successful Property Letting” - the UK’s top selling property and buy to let book for the last 3 years.
I have been a landlord and property investor myself for over 25 years.
At LettingFocus we offer independent unbiased seminars for buy to let investors and landlords as well as one to one advice covering all aspects of being a landlord and investing in property.
I am able to give unbiased independent advice on where to buy (which areas), what type of property to buy, when to buy and how to buy property at a low price. I can also explain how to reduce the risk of getting a bad tenant.
I also do a lot of corporate consulting work in the private rented sector with banks, property websites and local authorities and RSLs - helping with their buy to let and landlord facing products and services.

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Related Article:
http://www.lettingfocus.com/pages/myarticles_Local_Housing_Allowance.html

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http://www.lettingfocus.com/pages/myarticles_ChoosingaLettingAgency.html

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Lack of Social Housing Will Force House Prices and Rents up by Lawrenson of LettingFocus

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I See Few New Houses
Imagine you are Gordon Brown. You have survived the election and its tough times. Or, if you prefer, imagine you are David Cameron, the perennially smoothly shaven new PM.
You know the dire state of public finances and you know that some government spending has simply got to be cut – but where do you cut?
Public sector pensions will be a candidate, sure, but that will take years to bear fruit in terms of lowering the burden on taxpayers.
I would guess that while all areas could come under the knife the two areas that are least likely to be cut will be health and then education.
Why? Well, health is an area where the government can arguably claim to have made some progress since 1997. Education is a big priority area too.
In both health and education I would guess that anything near the front line services will be spared anything much in the way of cuts.
So once all the many Questionable Quangos with their well paid Execs have been cut down a bit where else do the big cuts come?

Social Housing
I would guess social housing would be one area that’s very likely to see cuts because the savings could be quite big here and the government can always do what they have been doing for years – which is look to private landlords to take on the role of “Provider of Housing of Last Resort” through the Housing Benefit/ LHA system (at least until the public finances are back in shape.)
With not much new housing stock being added – whether private sector or public sector - this will only put further pressure on house prices and rents to continue their inexorable rise, at least in those parts of the country where the economy is still reasonably strong.

ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
We are LettingFocus.com - the property experts and I’m David Lawrenson, the author of “Successful Property Letting” - the UK’s top selling property book for the last 3 years.
What’s unique about LettingFocus is that I offer independent unbiased
property seminars covering property investment and letting because unlike most people in the buy to let and property “advice” business I am not linked to a property company, developer, agent or bridging loan financier.
I can tell you where to buy (which areas), what type of property to buy, when to buy, how to buy property at a low price, how to make sure you get tenants who are going to pay the rent and how to manage a rental property to make money.
I can also comment on “No Money Down” Schemes and “Buying Below Market Value” methods too.
I can answer most questions on letting property because I have been a landlord and property investor myself for over 25 years.

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Local Housing Allowance Benefit Rates Are Too High & Open to Fraud say Lettingfocus.com. What’s Your Experience?

In our patch and the patches of many other landlords it is clear that Local Housing Allowance (LHA) rates are some way above private market rents.
Here in our area the local authority pays tenants the equivalent of £996 per month for a 2 bed property. But if you tried letting to private tenants who are not in receipt of this benefit it is not easy to get much over £870 for that kind of property.
So, no surprise that recently I have seen a few ads on letting sites where it says something along the lines of, “If you’re interested in letting to tenants on DSS/ LHA and are willing to say the rent is higher than it really is when I make a claim so we can share out the extra, then please contact me.”
Mmmm, this sounds a bit like fraud to me.
So the over-high LHA rates are making sure the taxpayer is being well and truly ripped off by being a green light to a few rogue landlords and tenants to try to “ring” the system.
So, please tell me if you are in an area where LHA is well above local rents.
We would also be interested in hearing about any cases where you know this kind of fraud is taking place. You don’t have to give details – we would just be interested in how widespread this practice is.
Let me know by emailing david@lettingfocus.com
Oh - and you may be wondering why are LHA rates so high?
Is it just that the Broad Market Rental Areas (BMRB) set by the Rent Service are just too wide and encompass too many diverse areas within a single BMRB? Yes, I would say so.
Could it also be that the high rates be a bribe by the government to get landlords to let to tenants on LHA (because landlords don't like the new system in which LHA is now normally paid to the tenant).
I think so.
The simple (though costly) solution to all this would be more council houses, but maybe I'm still living in the 1970s.
Thanks to LS for the tip off on this story. Local presence can help!

MORE TIPS ON USING A LETTING AGENT
Tell the letting agent what kind of tenant you want and don’t want. Think about who you want as well as how you do tenant reference checks.
Will you accept students? Animals? How about Student animals? Will you accept DSS? What should the tenants’ minimum income be?
Why tell the agent all this? Well, if you muck an agent about he will rightly have nothing more to do with you. So, be straight and be upfront. And confirm every conversation in writing too.
Tell the letting agent you will want to see the application form the tenant completed and the Tenant Report the agent gets back from the referencing company. Insist on reserving the right to speak to a prospective tenant before you agree to the letting. But only reject a tenant if there is a good reason to do so.
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I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Property Investment Book. The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, landlord registration and capital gains taxes.
I’m a property expert and property speaker - and I run the well known property blog that you are reading now.
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Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
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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.

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Copyright: David Lawrenson 2007. This blog is updated every week
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