Changes to Local Housing Allowance April 2012
As from April 2011 the rules changed on the calculation of the
Local
Housing
Allowance
(LHA). As a Landlord or Letting Agent you should always know what Housing Allowance '
Rent' your tenants claim for a property in the area. Just because they have 3 children it does not mean each child is entitled to a bedroom
see LHA rates payable
In addition as from April 2012 new under 35 ruling
The age limit of the Single Room Rate (SRR) will be raised from 25 to 35 years old. Around 88,000 claimants will be affected by this change which doesn't require primary legislation to be introduced. This change means some Landlords will see rent reduce by 35%
The details for Local Housing Allowance (LHA) are as follows:
The questions and answers below are intended to explain in more detail how the changes will effect Housing Benefit entitlement.
Questions and Answers
Will my Tenant be affected by the changes to Local Housing Allowance rates?
If they are renting from a private Landlord and they made their claim for Housing Benefit at their current address on or after the 7 April 2008 it is likely that they will be affected by these changes.
They have been getting Housing Benefit since before April 2008 could the changes affect them?
Provided they continue to live in the same property and they don’t have a break in their Housing Benefit claim the Local Housing Allowance arrangements will not apply to them.
Will they be affected by the caps?
The caps are most likely to affect people who are renting properties in central London Boroughs. If their weekly rent is more than the cap for the Local Housing Allowance rate that applies to them, their Housing Benefit will be reduced.
How do they know which Local Housing Allowance rate applies to them?
They can use the following information as a guide to work out how many bedrooms they are allowed. They are allowed one bedroom for:
- every adult couple (married or unmarried)
- any other adult aged 16 or over
- any two children of the same sex aged under 16
- any two children aged under 10
- any other child
- The maximum allowance is for four bedrooms from 1 April 2011.
Different rules may apply if they are under 25 or live in shared accommodation. Contact their local authority for further information.
My Tenant needs a property with more than four bedrooms. Will they only get benefit at the four bedroom rate?
The maximum Housing Benefit they get will be based on the four bedroom rate. They can still look for properties with more than four bedrooms, or other rooms that can be used as bedrooms, with rents that are within the four bedroom rate.
My Tenant is sharing a house with other people, will the changes to Local Housing Allowance rates affect me?
The new way of setting Local Housing Allowance rates from October 2011 could lead to a reduction in the shared room rate.
My Tenant is living in a self contained studio flat what rate applies to them?
The one bedroom Local Housing Allowance rate will apply to them.
My Tenant is already getting Housing Benefit when will they be affected by the changes?
If they are already getting Housing Benefit they will not normally be affected until 9 months after the anniversary of their claim which falls after 1st April 2011. But if there is a change in their household such as someone leaving or someone coming to live with them or if they move, the changes could apply sooner.
When is their anniversary date?
Their anniversary date is the date they first made their current claim. For example, if they claimed Housing Benefit on 5 September 2008 their anniversary date is 5 September.
This means that the changes the Government is making from 1 April 2011 could affect them from 5 June 2012. Although if they are receiving an excess payment they will lose this extra payment on 5th September 2011.
How will they know what the Local Housing Allowance rates will reduce to?
OR If My Tenant is thinking of renting and claiming Housing Benefit, how much rent should they agree to pay?
There is information available about the levels of Local Housing Allowance rates that might apply based on current rent levels. They can go to one of the following websites:
This information will give them an idea of the amount of rent that might be met by Housing Benefit from 1 April 2011. The figures are estimates and will be updated regularly. Rent levels and rates may change between now and April 2012.
They also need to remember that in southern areas, such as Central London, Local Housing
The rent my Tenant will be eligible for less Housing Allowance when the changes come in. What should I do?
Sadly the only thing you can do is serve a Section 21 Notice to quit. We are not saying evict the tenants. But common sense dictates if you need a higher rent than the tenants can afford then the Tenants are likely to fall into arrears. Should they fall into arrears then the Council will advise them to stay put until you evict them. The first step would be issuing a Section 21 Notice