Latest in Lettings Issue 7
HOUSING BENEFIT PAYMENTS - THE LOCAL HOUSING ALLOWANCE
A complete overhaul of the way rents paid by Housing Benefit are assessed began behind the scenes in October 2007. The new assessments will begin to be effective from 6th April 2008.
Local
The emphasis is on local conditions. The country has been divided into about 200 Broad Rental Market Areas (BRMA). This is the name given to a geographical area that will be used to decide the Local Housing Allowance (LHA) that will be paid for each of 5 sizes of property i.e. from 1 to 5 bedrooms.
The amount of Housing Benefit paid to a tenant will be the LHA. A mathematical average of rents charged within the BRMA. The size of property available to the tenant will be decided, as now, by the size of family, age and sex of children and dependent adults.
There will be a LHA paid for each size of property within each BRMA. A tenant choosing a home with rent payable above the LHA must make up the difference from their own resources. Tenants whose rent is below the LHA will receive the first £15 of the monthly saving.
The LHA is determined by reference to enquiries made from agents, landlords, local advertising and all published sources and is the average median rent for each type of property within each BRMA. The weekly or monthly amount that will be paid to tenants in the succeeding month will be published on the website 10 days before the end of each month. The new system will be email based and is intended to be transparent and open to agents and landlords.
Factors to be considered in deciding the BRMA must include:
- Access and standards of Health, Education, Recreation, Banking and Shopping
- Distance of travel by public and private transport
- Types of residential premises and tenancies
The BRMA must not favour a narrow geographical restriction. Residents will not be expected to travel from one side of a BRMA to another on a daily basis. The cost of rented property is not taken into account.
Rents will be paid DIRECT TO TENANTS and will only be paid to landlords if there is a persistent pattern of arrears. Agents and landlords whose tenants cannot obtain bank accounts should contact local Credit Unions who will frequently accept rent cheques, 'ring fence' the funds and pay to the landlord once cleared.
Exempt Cases
In certain cases rents will remain exempt from the LHA procedure. These exceptions will continue to be determined on an individual basis:
- Houseboats
- Caravans
- Mobile Homes
- Housing Associations
- Properties with more than 5 bedrooms
- Moorings
- Site Rents
- Hostels
- Boarded Attendance
Timetable
Information on BRMAs and LHA will be published on the Rent Officer web site from January 2008.
LHA will be paid from 6th April 2008 in the case of:
- New Claimants
- Amended Claims
- Change of address
- Periodic reviews
- After a break of one week or more in payment of benefit
The total transfer is expected to take until April 2010.