Am I getting the most rent out of Housing Benefit?

by Readers Question

11:04 AM, 6th November 2015
About 3 years ago

Am I getting the most rent out of Housing Benefit?

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Am I getting the most rent out of Housing Benefit?

I have several families who are potential tenants for me on housing benefit and was wondering if anyone knows about freelance housing benefit consultants.housing

Would it be best for me to use one to help me do a pre-assesment of the maximum benefit they would be entitled to?

My house is a 3 bed EX LA property. The housing benefit departments do this but a freelance consultant can sometimes help maximise the claim through their experience of the system.

Many thanks in advance.

Peter



Comments

Ross McColl

11:21 AM, 6th November 2015
About 3 years ago

What is the family make-up. The ages and sexes of any children?

Luke P

11:36 AM, 6th November 2015
About 3 years ago

As I think Ross is alluding to, you can figure this out yourself relatively easily (although you wouldn't know if they had a sanction/claw-back until you were in receipt of their HB.

Robert Mellors

12:21 PM, 6th November 2015
About 3 years ago

Hi Peter

As Luke P says, the basic determination is quite easy to do, e.g. input their details into the LHA Direct website, but there are quite a few anomalies and exceptions within the system which could make a difference to which tenants you choose, as:
the "exceptions/exemptions" could change the amount of Housing Benefit you receive, or
how you receive it, or
the likelihood of getting DHPs, or
getting third party payments from the DWP, or
the tenancy support services your tenants may be able to access (which could reduce your "risks").

A Housing Benefit consultant would probably only look at the Housing Benefit issues themselves, rather than looking at the bigger picture, e.g. most HB consultants would have no idea about getting third party payments from the DWP. I would therefore suggest that a landlord who has many years of experience in housing HB tenants would be a much better mentor for you in this particular situation.

David Oswald

17:12 PM, 6th November 2015
About 3 years ago

I agree with the previous comments.

Just go onto the council web site where your property is based and search LHA. This will tell you the maximum amount they will pay for each property size in their area. More than likely there will be an explanation of family make up for each property size as well.

Robert Mellors

18:40 PM, 6th November 2015
About 3 years ago

Reply to the comment left by "David Oswald" at "06/11/2015 - 17:12":

It is not always quite as straightforward as this. The maximum LHA is not necessarily the maximum Housing Benefit that the landlord could achieve from the property. This is because there are exceptions to most rules. Having a good knowledge of the situations that create those exceptions can enable landlords to maximise their rental income and minimise their potential risks/losses.
A very simple example of how knowing the exceptions can be useful is knowing how to get the Housing Benefit paid direct to the landlord from the start of the tenancy. Landlords who are unfamiliar with the Housing Benefit regulations often do not do this, or even struggle to get this in place even when the tenant has over 2 months rent arrears.
The new landlord may also wish to consider methods of reducing his risks, with the most obvious method being a rent guarantor (but there are other methods as well).
They may wish to consider ways to maximise the other possible income streams from the property, if appropriate for the property.
They may wish to consider different letting strategies (e.g. different household compositions), that could increase their rent, lower their risk, or lower their management hassle.
They may also benefit from knowing about other income sources for the tenant to enable them to pay their rent (or rent arrears), e.g. Discretionary Housing Payments (DHPs), local assistance schemes, deductions from other benefits, etc.
A Housing Benefit consultant is unlikely to be of much assistance, and going to a Council website is also unlikely to be of much use except for obtaining the basic LHA figure.

David Oswald

19:22 PM, 6th November 2015
About 3 years ago

You've got me very interested Robert. I let to HB tenants and I'm familiar with all the points you make except your statement in the first paragraph. Or are you referring to DHP top ups if the max LHA won't secure or retain a tenancy.?

Could you please expand on how to get more than the usual maximum LHA?

Robert Mellors

22:01 PM, 6th November 2015
About 3 years ago

Reply to the comment left by "David Oswald" at "06/11/2015 - 19:22":

One example would be overcoming the single room rent restriction (now called the LHA shared room rate). This is where HB is reduced for single people under 35, to the shared room rate, even if they are renting a self-contained flat/house. Someone 35 or over may get say £100 pw Housing Benefit, but a tenant under 35 may only get £60 pw (i.e. what the local authority considers to be the LHA rate for a room in a shared house). A landlord that does not know about the exceptions would therefore not offer a self-contained property to a single person under 35. However, if you ask the right questions when the potential tenants apply for the tenancy, you may find that the applicant falls within one of the various exceptions. The exceptions include people who are in receipt of certain disability benefits, but can also include people age under 22 who have been in local authority care, or those age 25 - 35 who have spent 3 months or more (at any time, ever) in a homelessness hostel, drug/alcohol rehab, or a domestic violence refuge. Of course most applicants would not declare this, and most landlords would not ask such questions, so many landlords are missing out on these potential tenants or are letting to them at a rent level below what they could achieve. This is one example (for self-contained tenancies). For HMO landlords, there are even more ways of maximising the Housing Benefit income.

Jonathan Clarke

23:44 PM, 6th November 2015
About 3 years ago

One of thee best ways to max out on LHA I find is to put a 3 bed entitlement family into a 2 bed property, a 2 bed family into a 1 bed etc . Such is the demand for accommodation that many of my applicants are quite happy to do this if it moves them to the top of the waiting list.

I always get paid direct since the housing amendment regs changed in 2011 and I will often get a months rent and a deposit funded by the council up front. They even paid up on one property I bought for a client before we had even exchanged contracts. .

Harry Chunk

8:45 AM, 7th November 2015
About 3 years ago

Reply to the comment left by "Robert Mellors" at "06/11/2015 - 22:01":

Not being facetious but why would you want those sort of tenants anyway.

Puzzler

9:29 AM, 7th November 2015
About 3 years ago

If your tenants are claiming for higher number of rooms than they actually have, is that not fraud?

They also should not be claiming more than the market rent. Of course that may be higher than the LHA rates but where I live there are plenty of properties which are not.

It's attitudes like this that give landlords a bad name.

See this recent article

http://www.bbc.co.uk/news/uk-34743526

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