Local Housing Allowance (LHA) is set to golive on 7 April 2008, for tenants in the deregulated private sector.
Essentially, LHA is a new way of calculating Housing Benefit based on the area in which the customer lives and the household size. It is for people who rent their homes from a private landlord, who are on a low income, and need help to pay their rent.
Local Housing Allowance is a central part of the government’s wider programme of benefit reform and aims to give Housing Benefit customers greater responsibility and will give landlords and tenants more choice and information. Local Housing Allowance is a flat rate allowance based on household size and location.
The new system will be fairer and more transparent and will encourage customers to take responsibility for budgeting for and paying their rent. Customers will know in advance the maximum level of Housing Benefit they can receive. For the first time, tenants living in similar circumstances will receive similar amounts of benefit to others in their area.
Local Housing Allowance will apply to private sector tenants who make a new claim for benefit and to existing tenants who change address or move into private sector accommodation, on or after 7 April 2008. Local Housing Allowance has been tried and tested in 18 local authorities, and has been subject to extensive and independent evaluation. The evaluation has shown that the LHA has been successfully implemented in all 18 authorities.
As a landlord, you will need to be aware that that payment of Local Housing Allowance will normally be made direct to the tenant. The tenant will be responsible for paying their rent to you.
Local Housing Allowance may affect any landlord who enters into a deregulated private tenancy agreement with a person awarded Housing Benefit. By deregulated, we mean a tenancy that has been entered into since 1989 and is not covered by one of the following exceptions: local authority landlords who let to ‘council tenants’, tenancies with registered social landlords, some supported housing, tenancies which started before 15 January 1989 (2 January 1989 in Scotland, tenancies in caravans, houseboats or hostel and tenancies where the Rent Officer has decided that a substantial part of the rent is for board and attendance, such as hotel accommodation.
For more information email firstname.lastname@example.org or visit www.dwp.gov.uk/lha