LHA - Information for Landlords

Local Housing Allowance (LHA) is Housing Benefit for tenants in private rented accommodation that came into effect from 1 April 2008. If you live in council accommodation or other social housing, LHA will not affect you

Local Housing Allowance was introduced in April 2008. It is a way of working out new claims for Housing Benefit for tenants renting accommodation from a private landlord. It also affects tenants already getting Housing Benefit who move into accommodation rented from a private landlord. Local Housing Allowance will not affect people living in council accommodation or other social housing.

With Local Housing Allowance, benefit is not usually based on the property in which the tenant lives. It is based on who lives with the tenant, which area the property is in. It still takes into account income and any savings a tenant may have. In some cases the amount of benefit will be affected by other things like how much the rent is and whether anyone living with the tenant is expected to contribute to their rent.

There is no change to the entitlement rules for Housing Benefit – these will still be based on a person's income, savings and proof of rent etc.

Why has Local Housing Allowance been introduced?

Local Housing Allowance has been introduced to increase responsibility, place choice firmly in the hands of tenants and help develop the skills to make the transition into work. The objectives of introducing Local Housing Allowance are:

  • Fairness - to pay similar amounts to tenants with similar circumstances.
  • Choice - to allow tenants to choose between price and quality of accommodation.
  • Transparency - it is easier for tenants (before they commit themselves to a property) and landlords to find out how much rent could be covered by Housing Benefit.
  • Personal responsibility - making tenants take responsibility for budgeting for, and paying, their own rent.
  • Financial inclusion - to encourage tenants to have their housing payments paid into a bank account and set up a standing order to pay the rent to their landlord.
  • Improved administration and reduced barriers to work - a simpler system helps to speed up the administration of housing payments giving tenants more confidence when starting a job that any in-work benefit will be paid quickly.

How does LHA affect landlords?

The only change for most landlords is that payment of benefit worked out using the LHA rates will normally be made direct to the tenant. The tenant will be responsible for paying their rent to the landlord.

Any landlord who enters into a deregulated private tenancy agreement with a person awarded Housing Benefit is affected by LHA. By deregulated, we mean a tenancy that has been entered into since 1989 and is not covered by one of the exceptions listed below.

LHA does not affect:

  • local authority landlords who let to 'council tenants'
  • tenancies with registered social landlords
  • some supported housing
  • tenancies which started before 15 January, 1989 (2 January, 1989 in Scotland)
  • tenancies in caravans, houseboats or hostels
  • tenancies where the Rent Officer has decided that a substantial part of the rent is for board and attendance.

What are the LHA rates for my property?

We will publish the Local Housing Allowance rates every month.

Direct payments to landlords

Tenants who get benefit calculated using the Local Housing Allowance rates should be able to take greater responsibility for managing their financial affairs and paying their rent to their landlords, in the same way as other tenants do. This is why any benefit will usually be paid to the tenant and not to the landlord.

In the past, there has never been a right for a landlord to receive Housing Benefit payments direct. However, there is a right for tenants to ask for this arrangement, and it is this right that is changing.

Any tenant who was getting Housing Benefit on 7 April, 2008, will continue to be paid the old way. If you are receiving Housing Benefit payments direct on behalf of your tenant(s), these will continue to be paid to you.

The Local Housing Allowance rules will only affect any tenants who make a new claim, move address to new private rented accommodation or have a break in their claim, on or after 7, April 2008.

If you are a landlord who owns or manages a number of properties, you may find that you have tenants who claim Housing Benefit under the two different schemes. This will mean that you may have tenants getting Housing Benefit that the local authority pays to you, and other tenants getting Housing Benefit calculated using the Local Housing Allowance rates who will pay you themselves.

What protection exists for landlords?

There are a range of safeguards to protect the interests of landlords. Some of these already exist. For example, a local authority must usually pay the benefit to the landlord if the tenant is eight weeks or more in arrears with their rent.

Payment may be made direct to the landlord where we decide that the tenant is likely to have difficulty in managing their financial affairs or unlikely to pay their rent.

We can also decide to pay benefit to the landlord if, during the current claim to benefit, we have had to pay the landlord because the tenant was eight weeks or more in arrears with their rent.

We recommend that, if a tenant is starting to build up rent arrears, you should get in touch with us before it gets to eight weeks. This will allow us to investigate whether there is a problem that needs addressing.

For more details about this, please see:

■Tenants who are likely to have difficulty paying their rent

Who decides if a tenant is likely to have difficulty in paying their rent?

The local authority will decide whether a tenant is likely to have difficulty in paying their rent. Evidence will be required to support a request, which can be made by the tenant or other interested party.

You, as a landlord, can approach us if you think it likely that your tenant will have difficulty in paying or you feel they cannot deal with their financial affairs. We will contact your tenant for further information regarding this.

It is up to us to decide whether a tenant is unlikely to pay their rent. We can only do this if we have evidence of past, or likely, failure to pay rent. We will take into account all knowledge and evidence available to us at the time, including any known past history when making our decision.

It will also be important for the landlord to keep proper and adequate records of rent payments received and details of any contact made with the tenant.