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Local Housing Allowance

Local Housing Allowance (LHA) is what was known as housing benefit for private tenants.

LHA is a maximum allowance towards rent costs, calculated on the basis of the circumstances of the tenant (such as family size) and the broad area they live in. The scheme has been designed to pay the same amount to tenants with similar circumstances living in the same area rather than looking at individual properties.

Who will get Local Housing Allowance?

Local Housing Allowance (LHA) will apply to:

• - Private tenants who make a new claim on or after 7 April 2008.
• - Existing Housing Benefit claimants in private tenancies who have a break in their claim of more than a week starting on or after 7 April 2008.
• - Existing Housing Benefit claimants who move to a new private tenancy on or after 7 April 2008.

Who counts as a private tenant?
A private tenant is someone who rents property or a room from a private landlord.

Who will still get Housing Benefit?
Other private tenants already getting Housing Benefit (HB) will carry on getting it under the old rules until one of the above applies.
The following types of tenants will still get Housing Benefit. There are no plans at present to change them over to LHA.

• - Council tenants.
• - Housing Association tenants.
• - Tenants who have a registered fair rent.
• - Tenancies which started before 1989.
• - Tenancies where care, supervision or support is included.
• - Tenancies of caravans, mobile homes or houseboats.
• - Tenancies where a "substantial" part of the rent is for board and attendance.

If a person claims LHA for what appears to be board and lodgings the local authority will refer the claim to the rent officer to determine if it is eligible for LHA. Most will not be. But the claimant can still claim "normal" Housing Benefit for board and lodging.

How much Local Housing Allowance can I get?

The amount of LHA you can get depends on:

• - Who lives with you.
• - What area you live in.
• - What money you have coming in.
• - What savings you have.

LHA does not depend on how much rent you pay. The LHA rates may be different for each area. These rates are the maximum amount of LHA you may get. You may get less than the maximum rate depending on your circumstances. LHA like Housing Benefit is means tested and so the more money that you have coming in the less benefit you get.

How Local Housing Allowance rates are set

LHA is set by the Rent Service Rent Service (This link will open in a new window) which is now part of the Valuation Office Agency (VOA).

Each council is divided into areas known as Broad Rental Market Areas (BRMAs). The BRMAs are defined by postcode areas. Rent officers will look at the range of rents charged for properties of a particular size in each area and take the middle point of that range as the LHA. From October 2011 the rents will be assessed on the 30th percentile. This means that only 30% of rents available will be below the LHA level. We do not know yet whether this will mean that properties where we will pay all the rent will be harder to find.
The Rent Service describes a BRMA as "Two or more distinct areas of residential accommodation, within which a person could reasonably be expected to live having regard to facilities and services for the purposes of health, education, recreation, personal banking and shopping." A person should be able to move within a BRMA and still have access to similar services of similar standards.
This means there are different LHA rates for different areas and different LHA rates within each area depending on the size of the property. Because rent levels for similar properties may vary according to the type of area some local authorities may have more than one BRMA. Tandridge falls into 3 areas - Crawley / Reigate (78), Outer South London (153) & Outer South East London (151).

Which Local Housing Allowance rate will apply to me?

LHA rates are based on the number of bedrooms; this is because the size criteria set out the number of bedrooms a claimant is deemed to need for their household.
LHAs for properties with up to 4 bedrooms will be published by local authorities. From April 2011 LHA no longer extends above the rate for a 4 bedroomed property. Therefore even if your family is large enough to need more than 4 bedrooms, LHA will not exceed the 4 bedroom rate. You will have to make up any shortfall yourselves. .
The Rent service are developing a website where you can check to see what LHA you may be eligible for. Click here for details. Benefits LHA Direct from the Rent Service (This link will open in a new window)

The rates are updated monthly. But the LHA rate paid to any particular tenant will only be reviewed annually, or when there is a change in circumstances which means a different LHA will apply.

A claimant or landlord cannot appeal against the levels of LHA set by the Rent Service.

What's different about Local Housing Allowance?

You will usually get any LHA paid to you and you will have to pay your rent to your landlord. Knowing the maximum amount of LHA will help you work out what rent you can afford. So when you go looking for somewhere to live you can work out how much money you will have. Then you can choose a place that suits you.
Some properties will have a rent lower than the amount of LHA you can get. From April 2011 the £15 "top up" facility has been removed. This means you will only be paid the lower rent. This is a legislative change and there is no appeal right against the removal of this.

 

How will Local Housing Allowance be paid?

IIn most cases your local council will pay LHA directly to you. You cannot choose to have your LHA paid direct to your landlord. You must have a bank or building society account in order to be paid LHA. Housing Benefit to non LHA tenants can continue to be paid, or the landlord, as the tenant wishes.

You can arrange for your bank or building society to pay your rent direct to your landlord. If you don't have an account you will need to open one. You will find help on the following link. Opening a Bank Account (This link will open in a new window)

In some exceptional cases we may be able to pay your Local Housing Allowance directly to your landlord. More details can found on the following links.

LHA Vulnerability Policy

LHA Safeguards for Landlords 

How do I find out more?

If you have any questions about LHA now, please use the contact details below.

You can also get further information on Local Housing Allowance from Department for Works and Pensions website:
Department of Work and Pensions (This link will open in a new window)

 

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