Local Housing Allowance – an introduction for landlords
Local Housing Allowance (LHA) is a new way of calculating Housing Benefit for tenants renting accommodation from a private landlord. It is being introduced nationally from 7 April 2008.
LHA affects any landlord who enters into a deregulated private tenancy agreement with a person awarded Housing Benefit. ‘Deregulated’ means a tenancy that has been entered into since 15 January 1989 in England and Wales and 2 January 1989 in Scotland.
LHA does not replace Housing Benefit. It will apply to tenants making new claims or changing address on or after 7 April 2008, so your existing tenants may not be affected immediately.
The amount of LHA paid to a tenant is not directly related to the rent that you charge, so the benefit that your tenants receive may be higher or lower than the contractual rent. The amount of LHA that tenants receive will be reviewed annually.
How LHA is paid
The main change for landlords is that the payment of LHA will normally be made directly to the tenant who will be responsible for paying the rent themselves.
Local authorities have developed safeguard policies to help those unable or unlikely to pay their rent themselves. These will be based on the circumstances presented to them by the landlords tenants and their representatives.
Local authorities can consider paying the landlord directly where there is evidence to suggest that the tenant is unlikely to pay their rent and making direct payments would be in the interests of the tenant.
Where arrears of benefit have reached 8 weeks, the local authority will arrange to make payments direct to the landlord unless it is not in the tenant’s overriding interests to do so. However, landlords are encouraged not to wait for the 8 week period to be reached before contacting the local authority.
More information
- Read a question and answer brief for more detail about how LHA will affect landlords.