A guide for Landlords
Local Housing Allowance (LHA) is how we work out how much of the contractual rent is used in the calculation of Housing Benefit.
The amount of rent used is determined by the location of a property, the size of the household and the ages of the household members.
Depending upon which Broad Rental Market Area (BRMA) your property falls into will decide which table of rates we will use to calculate the maximum rental figure for your property.
Tenants who are affected by LHA
If you are a private Landlord and your tenant makes a new claim for Housing Benefit then we will use LHA, to decide the maximum rental figure to be used, in working out how much benefit they would be entitled to.
If you are a Registered Social Landlord or a Housing Association then your tenants will not be affected by LHA.
If your tenants have a registered for ‘fair’ rent or their tenancy began before January 1989, they will also be unaffected by LHA.
Supported housing provided by Social Landlords, Charities or Voluntary Organisations will be unaffected by LHA as long as they are providing care, support and supervision for the tenant.
Tenancies for caravans, houseboats and hostels also remain unaffected by LHA.
If you provide board and lodgings for your tenant e.g. Bed and Breakfast then these will continue to be forwarded to the Rent Officer who will then decide whether or not they should come under LHA.
My tenant cannot manage their own affairs
We understand that not everyone has the ability to manage their financial affairs efficiently, which may be due to one of several reasons. We therefore have a safeguard in the event that this may happen.
If your tenant falls into one of the following categories it is likely that we will be able to make benefit payments direct to you.
- If your tenant is vulnerable tenant and is unable to manage their affairs.
- If your tenant is unlikely to pay their rent you may not have to wait until they are 8 weeks in arrears. Please contact us to discuss.
- If your tenant is in arrears by 8 weeks or more, this also includes non payment of rent due in advance up to the equivalent of 8 weeks.
- If your tenant is having deductions made from Income Support or Job Seekers Allowance to pay off rent arrears.
In all of these cases we will ask for written evidence from recognised sources such as a doctor, social worker, family member, CAB .
If your tenant is more than 8 weeks in arrears we will ask to see a breakdown of rent owed to show exactly the amount outstanding, we will investigate as to why rent has not been paid and will then decided who would be the most appropriate person to pay until the arrears have been cleared.
In 2011 a condition was introduced whereby payment can be made to the Landlord. This is for cases that the Local Authority considers will assist the customer to secure a new tenancy or retain an existing tenancy.
To qualify there must be evidence that the rent has been reduced.
It is also intended to provide landlords with an incentive to reduce rents to a level that is affordable to customers.
Application of direct payments can be made via our online form
In all cases we will review the situation on a regular basis
How LHA is calculated
Since 2014 Housing Benefit is calculated on a weekly basis - a monthly paid rent is converted to a weekly figure by multiplying by 12 months and dividing by 52 weeks.
Local Housing Allowance (LHA) monthly figures are converted to weekly by multiplying by 12 months, dividing by 365 days and multiplying by 7 days.
This means that the weekly figure we use to calculate Housing Benefit is different to the weekly LHA rate. Housing Benefit is restricted to the maximum eligible LHA rate that applies to the customer, so there may be a small shortfall.
example; Rent charged is £752.07 per calendar month
Housing Benefit would calculate the weekly liability to be £752.07 x 12/52 = £173.55
The LHA weekly rate used in the Housing Benefit calculation would be £752.07 x 12/365 x 7 = £173.08
If the customer qualified for maximum Housing Benefit they would be paid £173.08 every 4 weeks x 13 payments = £9000.16
The Customer would be charged £752.07 x 12 = £9024.84
This leaves a £24.68 shortfall for the customer to pay.
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