Local Housing Allowance and landlords
What is Local Housing Allowance (
LHA
)?
Local Housing Allowance is a new way
of working out Housing Benefit.
LHA
is for people on low income
who rent from private landlords.
LHA
is based on the number of
rooms people are allowed, not how much the rent is. The
number of rooms depends on who lives with the tenant.
Why has
LHA
been introduced?
Housing Benefit has long been criticised as an
extremely complex benefit that does little to promote personal
responsibility and can act as a barrier to work. Radical
reform is needed to simplify Housing Benefit and ensure it supports
the Government’s wider objectives for welfare reform.
LHA
is the central
element of the Housing Benefit reform programme.
Which landlords are affected by
LHA
?
LHA
affects any landlord who
enters into a new private tenancy agreement with a person who
claims Housing Benefit.
What are the exemptions to
LHA
?
The new scheme will apply only to Housing
Benefit customers in the private rented sector. The intention
is to focus the scheme on the majority of private tenancies,
Therefore a number of cases will be exempt:
- Registered social landlord tenancies (Housing
Associations)
- Local Authority Tenants
- Protected tenants, such as supported housing provided by
certain local authorities, social landlords, charities and
voluntary organisations.
- Tenancies which are excluded from current rent restrictions
(tenancies entered into pre 1989)
- Tenants of caravans, mobile homes, houseboats and hostels
- Cases where the Rent Officer judges that a substantial part of
the rent is attributable to board and attendance (Hostel
accommodation)
What are
LHA
rates based on?
LHA
rates are based on:
- A size criteria
- Broad Rental Market Areas (
BRMA
)
The
BRMA
will be based on the
midpoint of rents charged by landlords in the private sector for
properties of various sizes.
LHA
rates will be further broken
down into ‘room rates’ that will apply depending on the size of the
household. The size criteria will be based on allowing one
bedroom for:
- Every adult couple
- Any other adult aged 16 or over
- Any two children of the same sex
- Any two children regardless of sex under
10
- Any other child
Living rooms, kitchens and bathrooms are
ignored for the purpose of calculating the size criteria
Different
LHA
rates will apply in different
areas. We have three
BRMA
’s
- Middleton
- Rochdale
- Heywood
What is a Broad Rental Market Area (
BRMA
)?
A
BRMA
is made up of at
least two distinct but adjoining areas of residential
accommodation, that each:
- Allows reasonable access to facilities for
health, education, recreation, personal banking and shopping
and
- Contains a variety of types of premises and
tenancies
Rochdale will have three distinct areas
that in all likelihood will form the basis of the new
LHA
‘Broad Rental Market Areas’.
In brief Heywood is linked with Bury and Bolton, Middleton is
linked with Manchester, and Rochdale is linked with Oldham, Ashton
and a significant part of Tameside.
How do I find out what the
LHA
rate is for my
property?
The Rent Service will make an assessment of
the
LHA
rates for your
area. These rates will be reviewed monthly. The Rent
Service will notify us of the new rates just before the start of
the month.
How will Rochdale Borough
Council publish their
LHA
rates?
- Monthly on this website when details are
available
- In local information offices
What if the
LHA
rate is higher than the rent
charged?
The amount of
LHA
that a customer can receive
over and above their contractual rent is capped at £15 per
week.
Will mid year rent increases be taken into
account?
No. The
LHA
rate in payment will be
reviewed on an annual basis.
How does
LHA
affect
landlords?
The only change for most landlords is that
LHA
will be paid to
the tenant. The tenant will be responsible for paying their
rent to the landlord.
The Government wishes to move away from the
current Housing Benefit system where most customers have their
benefit paid directly to their landlord. The Government is trying
to encourage tenants to have personal responsibility for their
rent.
By paying
LHA
directly to the tenant it
ensures they take a personal responsibility of paying the rent to
the landlord and helps develop the budgeting skills unemployed
people will need when they move into the workplace.
The main benefit to landlords is that if they
do not receive the payments they cannot be asked to repay any
overpayment (unless they directly caused the overpayment and could
therefore be considered liable).
However, in recognition of the risk that some
tenants may struggle with the responsibility of paying their rent,
safeguards will be put in place.
Rochdale Borough Council can decide to make
payment to a landlord in a number of special circumstances.
- The tenant is in arrears of eight weeks
or more.
- The tenant cannot manage their own
affairs. The tenant’s inability to manage their own affairs
will have to be proved and payment to the landlord is strictly at
the discretion of the council.
Remember Local Housing Allowance will
not apply to an existing tenant unless they move or have a break in
their current housing benefit claim of at least one
week.
I don’t agree with the Local Housing Allowance rate
that will apply to my house, can I or my tenant
appeal?
No, it is not possible to appeal against the
LHA
level. This
is because the level is set for the whole
BRMA
and any appeal would affect
people who are happy with the level.
Further information
For further information please telephone or email one of
our benefits advisors using the contact details available on this
page.
You can also obtain more information on
LHA
by visiting the following
websites:
The Department of
Work and Pensions - this site contains detailed
information about
LHA
for local authorities, landlords and advisers and
intermediaries.
The Rent Service
- a government agency providing a rental valuation service to
local authorities in England, supplying them with a range of
valuations to assist them in settling claims for housing
benefit.
The Advice Service - the
online
CAB
service that
provides independent advice on your rights.