Below are the estimates based on the new weekly
rates of housing benefit by each local authority.
Named by the government as the 30th Shadow percentile
they are a benchmark for the new lower rate of LHA
to be introduced this April for new tenancies. The
30th percentile rule will affect existing tenancies
in January 2012, when they will be applied to all
existing claimants of housing benefit.
Benefit
claimants will no longer be able to keep the £15
excess limit on housing benefit and the single room
living allowance will be raised from 25-year olds
and under to 35-year olds. Researchers have been
corresponding with local authorities on behalf of
their landlords and affiliated letting agents regarding
the impact of the cuts. As a result, it’s
impossible to illicit any outcome with certainty,
but the estimated loss of £600 per year, per
average property may be a lesser amount when compared
with the cost of eviction.
To
issue a notice 8, a tenant must be at least 8 weeks
in arrears if paid monthly, to issue a notice 21,
the tenant must have come to the length of the term
on their tenancy and 2 months notice is given to
the tenant regarding eviction. After this time,
you may apply for a possession hearing, but even
if granted, if the tenant has not yet vacated, you
must again apply to the courts for a bailiff warrant.
If
the tenant is receiving LHA payments direct and
they are faced with a notice 21 or 8, there is every
chance that a landlord will not receive the rent,
with a lengthy eviction process, legal costs and
impending county court closures causing longer hearing
times, the cost for a landlord could potentially
run into thousands, and this is without rental voids
while awaiting a new tenant or any redecoration.
While
ministers for the DWP are offering incentives to landlords
to lower rent for housing benefit claimants in exchange
for direct payments, it may be worth asking your local
authority if the 30th percentile cap applies and if
the landlord complies with this cap, will it comply
with the direct payment incentive. Obviously this
advice may be of benefit to landlords with one or
a few properties, but for those with a large portfolio
and a high rate of tenants in receipt of housing benefit
the consequences could be devastating. Whichever route
landlords decide, it’s of significant importance
to weigh up all the options first.
