Every landlord will want to ensure their tenants can pay the rent. However, there can be situations where a tenant needs help from the government because their income is low. These individuals may be able to claim benefits. This could cover part or all of the rent. It is important to learn as much as possible about how these benefits work. To help, we want to look at local housing allowance in London here.
What is it?
LHA produces rates to determine the Housing Benefit for different situations. It is specifically for people who rent from private landlords in England, Wales, or Scotland. The goal is to ensure it is fair for renters and they can get similar rates to people who have council housing.
Local housing allowance first came in back in 2008. The move was quite a big change because it moved the benchmark for entitlement to the 30th percentile of rent in an area. Before this the rate was the 50th percentile (median).
The interesting thing about LHA is it uses data from local areas to determine what rates of Housing Benefit should be. To do this, it splits up locations into broad rental market areas (BRMA). Then it looks at how much private landlords charge for different properties in the BRMAs. The rent officer can then determine rates for different types of property, from single bedroom homes up to four bed properties.
Important details for local housing allowance in London
People who rent from private landlords may be able to claim LHA in various circumstances. Generally it will be available as long as you meet criteria in terms of your age, income and the amount of money you have in savings.
A crucial thing to remember is LHA depends on the status of the household too. Couples may not be able to claim if one party exceeds the income or savings limits. There can also be different considerations for households with adult children who could contribute or dependants.
In addition, there are rules for bedrooms. There will be allowances here for different types of household. LHA rates only go up to four bedrooms though. If a larger household needs five or more bedrooms, they can only get benefits for four.
On the topic of bedrooms, there can also be deductions from local housing allowance in London if you have spares. For example, you may be renting a home with four bedrooms but only use three of them. In these cases there may be a deduction from the benefits.
If someone can claim LHA, generally the housing benefit will be paid to them directly. It will then be their responsibility to pay the landlord. However, there are some situations where arrangements can be made to pay the landlord’s directly. Generally this is an option if renters have arrears, need some help securing a tenancy, or they struggle to manage their finances.
Do you need professional services?
Finefair Ltd is one of the capital’s best property experts. We specialise in areas like guaranteed rent and property management. Services are bespoke to suit each client, ensuring we maximise the value.
The goal here is to ensure we provide the best support for landlords. To that end we work to offer as much info as we can about essential topics. Local housing allowance in London can be one of them. Landlords should read about it so they are aware in case their tenants need the benefits.
If you want to find out more, there are several useful websites you can use, including Gov.uk. The VOA site is also the best place to find current rates.
Finally, if you want any help with your portfolio, you can speak to us.
