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Landlords’ Lettings Prices inform
the new Local Housing Allowance

from "UK Landlord" magazine, January 2008

With new rules for Local Housing Allowance (LHA) coming into force this April, the Rent Service is keen to work with landlords to ensure LHAs for each area are realistic and up-to-date.

The Rent Service has prepared the following specific guidance for NLA members on this subject:

Local Housing Allowance (LHA), coming into effect from April 2008, is the cornerstone of the Government's Housing Benefit (HB) reform programme that aims to simplify HB and supports the wider objectives for welfare reform.

Under the new scheme a flat rate allowance will be paid to new claimants based on their entitlement to benefit. These figures will be published on a monthly basis by The Rent Service (TRS) and local authorities. This quicker, simpler system will help landlords to make informed business decisions before taking a tenant who is in receipt of benefit.

Why it's so important Landlords work with TRS

Under the new system the LHAs will be based solely on rents achieved in the local Private Rented Sector (PRS). This means that lettings information obtained from landlords by TRS will inform the LHA rather than it being dependent on the opinion of rent officers. LHA will be a median figure automatically calculated from a 'list of rents' gathered across a geographic area known as a Broad Rental Market Area (BRMA). The allowance will be based on the number of bedrooms a claimant is entitled to, reflecting the way properties are advertised and let on the open market. Standard published categories will range from 1 to 5 bedrooms.

The median calculation will mean that around 50 per cent of the property available for rent should be at or below the LHA rate, so tenants will have a wide choice of affordable accommodation within the BRMA.

As the market determines the LHA, TRS is gathering a representative sample of lettings from all parts of the PRS. As landlords you can contribute by providing examples of properties let. The more comprehensive the 'list of rents', the more accurately the LHA will reflect and track the market.

This is important for you as a responsible landlord who wants to ensure your tenants receive a level of benefit that will help them sustain their tenancies if they ever need it. It also ensures LHAs are accurate and taxpayers get value for money.

The 'list of rents' will be compiled from rents achieved over the previous 12 months so information landlords provide now will contribute towards the figures published for April. Please don't delay - just one example from every NLA member a month will add a huge 156,000 lettings to the list of rents every year!".

There are three ways in which you can send information to TRS:

Lettings Information Form:
Available from the Rent Service website. This can be emailed to or faxed to 020 7023 6143.

Telephone:
Contact your local office and speak to a lettings research officer - details on the Rent Service website. We are happy to arrange a visit or attend local landlord forums.

Bulk Data Transfer:
We can accept larger amounts of information electronically. Please call 020 7023 6133 to discuss this option further. All data collected will be held securely in accordance with the Data Protection Act 1998.

We are also happy to explore other ways for landlords to provide information and are discussing an initiative with NLA to make it easy through your excellent online 'NLA member property to let' facility." For more information, see the article 'NLA Watching Brief: Local Housing Allowance'.

Rugg Review:
The Independent Review of the Private Rented Sector has been published. See how it affects you.

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