Local Housing Allowance and most landlords will run
a mile, but it doesn’t have to be that way. LHA
is an opportunity to increase cash flow and produce
rental yields that we haven’t seen for years,
all you have to do is embrace it.
As the saying goes “Knowledge is power”
and with LHA it is certainly the case. Since it was
nationally rolled out on April 7th 2008 there has been
a distinct lack of information regarding how it works.
Quite a lot of councils didn’t have an exact idea
of how it worked when it first came out. Obviously this
was a complete disaster for landlords hence the immediate
hatred of LHA and a noticeable decline in the amount
of DSS tenants in privately rented accommodation.
time went by the councils seemed to get their act together
and came up with procedures and safe guards, but the
problem was that you could have 3 councils next to each
other with 3 very different views on a particular topic,
such as paying the landlords direct after the tenant
being in 8 weeks arrears.
are 3 varying opinions on how different authorities
have interpreted the DWP guidance to us:-
After 8 weeks in arrears the Landlord can contact the
council and get paid direct but not before the 8 weeks
2. After 8 weeks in arrears the Landlord could contact
the council and get the claim put on suspend. The council
would then contact the tenant to ascertain why they
have not paid the Landlord and providing they admit
none payment the council would pay the Landlords, this
could take up to 11 weeks
3. After 4 week the landlord would contact the council
and get the claim put on hold, while the council contacts
the tenant to discuss the situation. If after 8 weeks
the tenant hasn’t given a satisfactory reason,
the council pays and backdates payment to the landlord.
the opinions vary greatly and one can understand the
frustration of the landlord. However the councils can
only act on how they interpret the guidance. There is
no hard and fast rule and this is part of the problem,
its all open to interpretation.
I suggest is become familiar with the guidance. Speak
to the councils and get their safeguard and policies
so you know exactly what you are dealing with. They
will vary from council to council so make sure you do
it for every local authority.
This may sound obvious but you would be surprised to
find how many landlords do not speak to the council
or the tenant. Its very much a them and us scenario
and that landlords have to be wary of the councils,
this is certainly not the case. I agree sometimes you
can get a council officer who is unhelpful but I’ve
found that by being open, polite and friendly you can
get a lot of information.
the tenant has moved in it imperative that you know
what LHA rate the tenant will qualify for. There is
no point thinking they will get 3 bed rate but suddenly
find out they only get the single room allowance.
your getting all the information from the tenant you
should be asking for copies of their child benefit or
tax credits. This will show how many children the tenants
have and therefore has a major impact as to the rate
they would qualify for. Its not uncommon for a tenant
to say they have 2 children, but you find out at a later
date, they only get the children on a weekend, and therefore
would only qualify for the single rate.
check with the council or the LHA website (www.lha-direct.voa.gov.uk)
to find out the amount of rent you will get for each
rate. It has happened in the past where the council
can get the amount wrong so in my experience its best
to double check by visiting the website.
website also has a facility which you can input the
ages and sex’s of the children and it automatically
lets you know which rate the tenant will get, a very
need to talk to the council at all stages of the application,
you need to be aware of any additional information they
require as this will hold up the application for weeks
and maybe months.
councils have to comply with the Data Protection Act
and we used to regularly be told that the councils can
not discuss the tenants claim with us. Now, we ask the
tenant to sign an information disclosure form with the
initial housing benefit application so the council will
discuss any hold ups and what they need to speed up
you talk to the local authorities most of them sympathise
with landlords, they understand the difficult situation
that we are in. After all its making more work for them.
They have to deal with angry landlords, tenant evictions,
appeals and disputes to decisions they have made.
one local authority we deal with, appeals and disputes
increased by over 240% and this was due to decisions
to pay the tenant direct, as we all know local authorities
are driven by facts and figure, this was a figure they
would rather forget.
Another obvious factor but equally overlooked. When
putting a tenant into your property you need as much
information as possible. Below is a list of information
that we ask for from the tenant to help speed up the
housing benefit claim. The more information you give
the council then the quicker they can process it.
ID x 2
• Prof of benefits
• Proof of Child benefit (If applicable)
• Proof of income – Tax credits, maintenance,
Part time work
• Last 2 months bank statement
• Proof that they have changed their address with
are obviously other information we require such as application
forms and guarantors etc but the above list is only
applicable to the housing benefit claim.
copies of all information you handed in and also ask
for receipts. Paper does go missing at councils despite
them telling you otherwise. Lack of receipts could set
your claim back months, you try and get information
out of tenants once their in the house, its virtually
the council have all the information in they MUST have
reached a decision within 14 days and informed you of
can also expect an interim payment, payment on account,
until the claim has been fully processed. The amount
will be based on whatever information the local authority
have about the tenant circumstances, therfore it is
vitally important to have all the information that the
local authority needs right from the start.
is imperative that you chase the application as often
as possible, otherwise it will inevitably find itself
on the bottom of the pile. We chase all applications
2 or 3 times per week, to the point where some local
authorities have fast tracked them to get us off the
a record of what information and when you submitted
the application, keep a simple excel spreadsheet and
check it regularly. Write down who you spoke to and
what was said.
may seem like extra work but by being organised and
on top of things it can save you hundreds if not thousands
of pounds. By being in constant contact with the local
authorities if one slips through (it always happens)
then you can contact the tenant prior to them receiving
the money explaining you know they are getting paid
direct and that you will come and collect the rent.
to prove that we are all human and make mistakes I will
tell you about the first tenant I put in after LHA came
into force. I completed the forms with the tenant and
handed them in to the council. At that time it was just
a simple tick box as to who the tenant wanted to get
paid direct. I was not aware at the time and neither
were the council in question that, evidence was required
in order to pay myself direct and no the tenant.
chased the council every couple of weeks and after about
9 weeks kicked up a fuss only to be told that the tenant
had been getting paid from week 6 onwards. The tenant
had received £1050. As you can imagine I was furious
and demanded to know why the tenant had been paid direct
and lack of evidence was the answer. I never made the
same mistake again.
to clarify, the three most important aspects that are
needed when dealing with LHA are:-
- of how LHA and your council work are vital. You need
to understand the system and how to work its. Remember
it will vary from council to council so cover all your
– You need to be able to talk to both tenants
and local authority. They are not out to get you, despite
what you think. Build up a rapport with the benefit
section, you will be surprised at how friendly they
are and how much they are willing to help
and Monitoring – Make sure you have copies
and receipts of everything you send to the council.
Chase them 2 or 3 times a week and act quickly on anything
that the council ask for.
All the Best
"The secret of success
in life is for a man to be ready for his opportunity
when it comes." Benjamin Disraeli