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0:02 AM, 11th April 2024, About a month ago 53
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Landlords renting to Universal Credit tenants are being warned of potential payment inconsistencies in light of recent changes by the government.
The Chancellor Jeremy Hunt unveiled plans to unfreeze Local Housing Allowance (LHA) which will increase to the ‘30th percentile of local market rents’.
Despite promises of increased housing support for low-income renters starting from April 1st, 2024, many landlords are still receiving payments based on the old rates, despite the government’s pledge.
Mick Roberts, one of Nottingham’s largest landlords to house benefits tenants, says his tenants are still being paid on the old rate.
He told Property118: “I’ve been undercharging my benefit tenants for years and trying to look after them with cheap rents.
“There was a sigh of relief when the new LHA rates were introduced and promised on the 1st of April 2024.”
He added: “However, some landlords including myself are now being paid and thinking why am I still being paid the old rate?
“My tenants are ringing me who get paid on the 13th of April and who have their award notification from UC to say they are still being paid the old rate.”
Bill Irvine, a universal credit expert, says payments based on the new rates won’t kick in until after the tenant’s first Benefit Assessment Period (BAP).
In a blog post, Mr Irvine explains while the government announced the increase effective on April 1st, the actual payment adjustment follows a different timeline.
He says it’s not straightforward, especially for UC claimants, and has created a helpful timeline to demonstrate:
Mr Irvine explains many universal credit tenants will receive a delay in payments.
He told us: “Most private landlords were delighted when the Chancellor confirmed the unfreezing of the LHA rates from April after a four-year wait.
“Because the LHA changes are subject to the Rent Officer’s order, the example relating to Tenant A above, applies to both his personal and “housing costs element.
“So, where private tenants have a BAP starting, between the 1st to 7th, they will have to wait until 7th-14th June before they receive their first payment at the higher rates.”
Mr Roberts says the confusion will cause many landlords to simply not rent out to benefit tenants.
He said: “This will be another reason some landlords will refuse to take UC tenants.
“It’s just one more factor that adds to our concerns and may ultimately lead us to reconsider our tenant selection process, perhaps opting for higher-earning non-benefit tenants in the future.”
When approached by Property118 for comment a spokesperson from the Department of Work and Pensions said: “Our increase to the Local Housing Allowance rate means that 1.6 million private renters on the lowest incomes will be around £800 a year better off.
“This is on top of the over £30 billion we are investing in housing support this year, while our Discretionary Housing Payments provide a safety net for anyone struggling to meet their rent or housing costs.”
“The increase to the Local Housing Allowance rates from April 2024 applies to the ‘relevant Monday’ in a new Assessment Period for UC claimants following the start of the new tax year.
“This aligns to Universal Credit (UC) benefits uprating which also comes into force from the start of the first Assessment Period beginning on or after the first Monday of the tax year.
“As UC is a monthly assessed benefit that is paid in arrears, a claimant will receive their newly uprated benefit award and their increase to LHA at their first full Assessment Period that follows the change.”
Slooky
16:21 PM, 11th April 2024, About a month ago
Reply to the comment left by Cider Drinker at 11/04/2024 - 09:05
I had to read the article a couple of times to understand it. It's not about being paid a month in arrears it's about not being paid the increased LHA rate at all for possibly over a month as from April 1st. It's pot luck as to when a claimants benefit period is and claimant is not at fault.
It's down to the unfairness of the new UC system and how it works.
So some people will not be paid the full rate at all for April. The first date they will get the increased payments t will be May which will be paid 5 weeks in arrears so June.
UC system is bonkers
Reluctant Landlord
16:25 PM, 11th April 2024, About a month ago
Reply to the comment left by Mick Roberts at 11/04/2024 - 16:02ditto. I am able to keep to LHA rate for some of my properties or just £20-£30 a month over so top ups are affordable (plus it makes the tenant feel they are contributing/empowered/self responsible which is what the government are trying to encourage, right?! 😉 )
For others I charge market rate but am aware that in some areas, as the tenant pool is mostly going to be UC claimants, what I can realistically charge is essentially capped. I am even thinking of advertising with a rent range - like £1300 - 1500 pcm as a result.
I don't discriminate anyone from applying and take every application as it comes in - first come first served basis, but what I do look at is each one on its merits WITH affordability at the same time rather than just affordability at a set figure only.
It might seem time consuming, but it's all about risk mitigation too. Having a benefit claimant IS a higher risk I don't care what anyone says simply because of the way the rent is paid by DWP contribution, so that has to be factored in.
Mick Roberts
16:25 PM, 11th April 2024, About a month ago
Reply to the comment left by Slooky at 11/04/2024 - 16:21
Yes exactly, if your payment date is 13th April & 13th May, you (the tenant) are getting no help till 13th June. Terrible for UC tenants.
Mick Roberts
16:27 PM, 11th April 2024, About a month ago
Reply to the comment left by Reluctant Landlord at 11/04/2024 - 16:25
Yes & we look at Selective Licensing on it's merits & if we've done nothing wrong, & being asked to pay £890 for a License the tenant doesn't want & we charging super cheap rent, I'm sorry the tenant is paying for this via a rent increase. Rent pays for everything. Gove & Councils constantly forget this when they think Let's hammer this Landlord.
Reluctant Landlord
16:30 PM, 11th April 2024, About a month ago
Reply to the comment left by Slooky at 11/04/2024 - 16:21
the irony is the system which should not discriminate clearly does and in having these stupid date applicable quirks etc, just makes it easier for a LL to say...nope, wont bother with a UC claimant because it's too complicated.
Reluctant Landlord
16:51 PM, 11th April 2024, About a month ago
The only thing it does mean is that for the LL with a tenant where the BAP is 9 March - 8 April, the payment received on 15th April will be for new LHA rate for that WHOLE BAP period, despite the rise only being applicable from 8th April because the change on the 8th is regarded as having happened DURING this BAP period.
As ever the flip side is if your tenants BAP is 8 March - 7 April that payment in April will be at the old LHA rate. New LHA rate will only be applied and payment increased in the rent received in May for the 8 April - 7 May period.
Mick Roberts
16:56 PM, 11th April 2024, About a month ago
And this is another thing we have to do that we don't have to do for working tenants, gal has just 10 minutes ago had to put this on her journal after another UC staff imbecile kid has just told her she's not being paid AT ALL due to a rent increase.
Dear UC,
You have asked for the page of the tenancy that the rent has gone up.
I appreciate your new members of staff may not know this.
Can you please pass this to someone who understands Tenancy Law.
The tenancy could be a 20 year old tenancy. It WILL NOT show the new rent. This is what a rent increase letter is for. I have sent you this already, I have just sent it again.
Why was the rent increase letter removed at the same time which was valid?
Can u confirm u r now going to stop asking for a new updated tenancy with current rent on? As to do so is ILLEGAL. It is called an untidy tenancy & must under no circumstances happen unless tenant & Landlord bring tenancy to and end. This will be frowned upon should it ever go to court & Judge will want an investigation into why Pre-Protocol action wasn't taken by UC.
I request u to & give explicit consent for you to contact my Landlord to deal with this rent query until my Landlord starts to receive the rent in his bank & until this housing costs query is solved.
https://www.gov.uk/government/publications/consent-in-universal-credit/consent-in-universal-credit
Where consent is needed it can be quickly given in different ways. For example, claimants only need to put a note in their journal to give consent, this is a far simpler and more straightforward process than in legacy systems. Once consent is given, advisers will work with the claimant’s representatives.
I give full consent for my personal information to be shared with the representative
All information to be disclosed
Information is needed to get my Housing Element paid as your failure to do this is going to render me homeless.
Representative is Mick Roberts 079XX
I request you ring him to solve this current problem we are not able to solve by computer & messaging.
Mick Roberts
16:58 PM, 11th April 2024, About a month ago
Reply to the comment left by Reluctant Landlord at 11/04/2024 - 16:51
Reluctant, this works with moving in tenants where we get paid even if they weren't there.
But on rent increases, No tenant is getting the new rate until 14th May onwards.
Slooky
17:19 PM, 11th April 2024, About a month ago
Reply to the comment left by Reluctant Landlord at 11/04/2024 - 16:51
I think the article said they were not going to follow that ( usual) particular rule when assessing for the new LHA rate!
Lisa Mack
22:00 PM, 11th April 2024, About a month ago
Reply to the comment left by Reluctant Landlord at 11/04/2024 - 16:51
That's incorrect. They will not receive the increased LHA until they've had a full BAP after 8th April. The first people receiving the higher rate will get it mid May but a significant amount won't get the increased LHA until their June payment.