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Local Housing Allowance: What Does it Mean for Landlords? Effective 7 th April 2008

Local Housing Allowance: What Does it Mean for Landlords? Effective 7 th April 2008. Inside Housing Solutions Ltd South Barn, Cowix Farm, Capel Road, Rusper, West Sussex RH12 4PY Tel: 01293 871107 info@insidehousingsolutions.com. Why has LHA been Introduced?. The Government says;

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Local Housing Allowance: What Does it Mean for Landlords? Effective 7 th April 2008

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  1. Local Housing Allowance: What Does it Mean for Landlords?Effective 7th April 2008 Inside Housing Solutions Ltd South Barn, Cowix Farm, Capel Road, Rusper, West Sussex RH12 4PY Tel: 01293 871107 info@insidehousingsolutions.com

  2. Why has LHA been Introduced? • The Government says; • HB criticised as complex, doing little to promote personal responsibility • HB does little to assist Tenants to develop financial & budgeting skills • Improved administration • Promote choice, transparency, financial inclusion etc etc

  3. The New LHA System • Tried & tested in 18 Local Authority areas • Applies to: • Tenants who have made a new claim since 7th April 2008 • Tenants who have moved address to new accommodation since 7th April 2008 • Tenants who have had a break in their claim for one or more weeks since 7th April 2008 • Your Existing Tenants will not be affected unless any of the above occur

  4. Those Exempt from LHA • LHA does not apply to the following: • Local Authority Landlords who let to “Council Tenants” • Tenancies with Registered Social Landlords • Some supported housing • Tenancies that started prior to 15th January 1989 • Tenancies in caravans, houseboats or hostels • Tenancies where the Rent Officer has decided that a substantial part of the rent is for board

  5. What is LHA? • Flat rate of benefit based on: • Who lives with the Tenant • Which area the property is in • How much money the Tenant has coming in • What savings the Tenant has • LHA rates will be set each month • Rates will be published

  6. The Role of the Rent Service • Setting Broad Rental Market Areas • Collecting Market Data • Establishing the median rent from a list of market rents • Providing the rate to each Local Authority on a monthly basis

  7. The Median Rent £60 £70 £80 £85 £90 £90 £95 £95 £95 £95 £100 £100 £105 £110 £115 £120 £130 To ensure the LHA reflects the distribution of rents in a BRMA it is calculated by reference to the median rent. The median rent is the rent that is halfway up the ordered distribution of rents for properties of the same size in a BRMA. In the example if there were 17 lettings of a 2 bed in an area with the rents shown here, the median would be £95 as this is in the middle of the distribution.

  8. Household Size • One bedroom is allowed for each of the following: • Every adult couple (married or unmarried) • Any other child aged 16 or over • Any two children of the same sex aged under 16 • Any two children aged under 10 • Any other child • Living rooms, kitchens & bathrooms are ignored for the purpose of the size criteria

  9. Household Size • Over 25s, single, with no dependents are entitled to the 1 room rate unless they are living in shared accommodation • Under 25s, single, with no dependents are only entitled to the shared room rate • A couple with no dependents are entitled to the 1 room rate unless they are living in shared accommodation • Joint Tenants will receive a rate of LHA based solely on their own household

  10. Household Examples • Couple – 1 room • 2 children of the same sex aged 2 & 6 – 1 room • Size Criteria – 2 bedrooms • Single Parent – 1 room • 2 daughters aged 8 &17 – 2 rooms • 1 son aged 12 – 1 room • Size Criteria – 4 bedrooms

  11. LHA Rates By Area – Aug 2008

  12. Main Changes for Landlords • Tenants will receive the payments direct • Tenants will be allowed to keep a difference between the allowance they receive & the contractual rent. This is capped at £15.00 per week • If the Tenant is being paid direct, the Landlord will not be pursued for any overpayments

  13. Protection for Landlords • If a Tenant falls 8 weeks in arrears or more, the Local Authority will pay the Landlord direct • Payment may be made direct to the Landlord where a Local Authority decides that the Tenant is: • Likely to have difficulty in managing their financial affairs • Unlikely to pay their rent

  14. Advice for Landlords • Assess your current Tenancies • Keep proper & adequate records of rent payments received • Keep proper & adequate records of contact made with your Tenants • Arrange direct debits/standing orders • Submit your evidence to the Rent Service • Make sure your Tenant has allowed the HB department to discuss their claim with you • Contact your Local Authority as soon as your Tenant misses a payment – don’t wait 8 wks!

  15. Contact Details Inside Housing Solutions Ltd South Barn, Cowix Farm Capel Road Rusper West Sussex RH12 4PY (01293) 871107 george@insidehousingsolutions.com mike@insidehousingsolutions.com

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