Finefair Ltd has always been a company that has provided reliable details to every client. There are many different topics we cover. Examples include guaranteed rent, property management, and council leasing. We even talk about local housing allowance in the City of London. If this is what you are after specifically, please continue reading.
Understanding LHA
In 2008, the UK Government introduced local housing allowance. It provides a way of calculating Housing Benefit entitlement. This is for any tenants renting private sector accommodation in Scotland, England, and Wales.
The introduction made a considerable change to how they pay housing benefits and with restrictions. Most famously was the alteration to entitlement on the 30th percentile of rental accommodation in the local community. Before this, everyone used the 50th percentile or median.
The purpose of local housing allowance (LHA) is utilising private market rental rates to see what individuals are paying in the area, known as the BRMA. It examines rates for the same amount of bedrooms in the building. What the goal here is exactly is guaranteeing that tenants in a location with similar properties are able to claim the respective amounts. Additionally, LHA helps with controlling costs.
LHA rates
Usually, they are set in January and then take effect in April every year. The rent officer produces a list of LHA rates for every broad market rental area and every form of dwelling within each area. This is up to the rate of a four-bedroom property. Any properties with five bedrooms or more will receive the four bed rate.
Since LHA rates depend on the area, it is necessary to check locally to discover more about your housing benefit. When it comes to local housing allowance in the City of London in particular, there are numerous vital details to note. We’re going to look at some of them here to give you a little help.
Greater London’s BRMAs
At present, there are 14 BRMAs (Broad Market Rental Area) that relate to Greater London. Five separate LHA rates get established for individual property sizes in all the BRMAs. They include the Shared Room Rate, as well as structures up to four-bedrooms and including them.
Since 2011, there have been massive changes to the way we calculate LHA. During 2011, LHA entitlements for all five property sizes inside the BRMA got pegged to the 30th percentile of local rents. This means that were only able to obtain support for the least expensive 30% of rental properties in the local community. Before, LHA would cover up the median price of renting.
National caps for LHA
During April 2011, nationally applicable caps for weekly LHA receipt were introduced. Housing Benefit Claims are unable to surpass these levels. This is the case even when the 30th percentile rent is greater. Presently, these caps are £260.64 every week for one-bed buildings and £302.33 for two-bed ones. For three-bed properties, it is £354.46, and for four-bed properties it is £417.02.
Greater London has undergone sustained and strong growth in rent levels. Due to this, the LHA reform effects have been able to generate an expanding gap. This is between the amount housing benefit will pay for and the price of private rental accommodation.
Need more help with local housing allowance in the City of London?
Our goal here at Finefair Ltd has always been to supply the broadest array of services. It includes guaranteed rent with local councils, management, and even portfolio services. At the same time, we want to offer the best advice about an array of topics. This includes local housing allowance in the City of London. If it can be important to landlords or tenants, we want to share info about it.
So, if you want the right degree of help and wonderful value with every service, choose us. You can contact us today for advice.
