Local Housing Allowance Mandy Barnes Local Housing Allowance Projects Officer

1. Local Housing Allowance Mandy Barnes Local Housing Allowance Projects Officer

2. Over View • Review of the key points • Facts you need to know • Benefits to landlords • Disadvantages to landlords • How to minimise the risks • The way forward

3. Review of the Key Points LHA is a flat rate benefit that will normally be paid directly to the tenant It will be phased in as of the 7th April 2008 All claims before this date will continue to be paid under the old housing benefit rules unless: There is a break in the claim of one week or more, or there is a change of address LHA will be based on the number of bedrooms, set monthly in advance and published online by the rent service The eligibility criteria remains unchanged

4. Facts You Need To Know • The DWP Guidance allows for the first payment to be made to the landlord. • The DWP guidance allows for payment direct to the landlord for up to eight weeks, whilst establishing a tenants ability or desire to pay. • DWP guidance allows for payment direct to the landlord earlier than eight weeks when appropriate. • The tenants right to ask for ‘payment to a third party’ still exists, just not to the landlord, so you could ask for a guarantor to accept the third party payment. • Some credit unions have said they will accept the LHA into a ringfenced account and then pass it over to the landlord. • You can apply to the DWP to deduct arrears from IS and JSA for existing tenants.

5. Benefits To Landlords Transparent system allowing you to know without doubt what rental values will be achievable in a LHA market. The published LHA rates could also be used to: Maximise your rental income Assist in selecting new properties for your portfolio Some areas may see rents increase as they are grouped with other larger towns to create the BMRA Excess LHA can be paid direct to landlords to clear arrears No exposure to overpayments

6. Disadvantages For Landlords The LHA is being driven by central government and is here to stay In most cases the LHA will be paid directly to the tenant. Increase in management of rental properties The ‘8 weeks in arrears’ dilemma: Possible exposure to eight week arrears wheel or cycle Possible exposure to ‘Floaters’; tenants who exploit the eight week in arrears rule to the maximum Exposure to unfounded disrepair claims

7. How To Minimise The Risks Understanding your local authorities approach to the LHA Rigorous vetting and selection crucial Get your tenant to sign an information release form Encourage your prospective tenants to set up standing orders A well prepared inventory signed at the commencement of the tenancy by the tenant. Scheduled and documented inspection visits signed off by the tenant Monitor arrears and report them immediately DO NOT WAIT FOR THE EIGHT WEEKS

8. The Way Forward • To ensure the LHA rates reflect current market trends feedback as much data as possible on achieved rental values to the rent office • Working together to develop a national data base of tenants that fail the ‘Fit & Proper Tenant’ test and waste public funds • Good feedback to the local authorities and landlord associations of problems encountered. • Landlord associations have been asked by the DWP to feedback experiences of the LHA. This will be done at the regular quarterly meeting at the DWP headquarters. • The NFRL, RLA, SAL & the BPF are currently working on a LHA project with the aim of comparing safeguarding policies across the UK and then developing a best practice guide.

9. National Federation of Residential Landlords 0845 456 9313 info@nfrl.co.uk www.nfrl.co.uk Full individual membership £70 per year by direct debit £75 per year by cash or cheque