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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.”
Bill irvine
13:40 PM, 20th April 2024, About 4 weeks ago
Hi Reluctant
If you’re contractual rent is currently less than the LHA rate, then the amount awarded by DWP will be capped at the contractual rent figure.
If notify the tenant (e.g., section 13) of your intention to increase contractual rent, he/she would report the new figure and upload the sect 13 notice to validate the new amount as a change in circumstances.
Bill
GlanACC
15:14 PM, 20th April 2024, About 4 weeks ago
Reply to the comment left by Reluctant Landlord at 20/04/2024 - 13:31
I don't see how the rent will automatically increase. You have set it at an amount and thats what is being paid. You would need to go through a 'form 13' and increase the rate which he would then have to submit
Mick Roberts
15:24 PM, 20th April 2024, About 4 weeks ago
Reply to the comment left by Ray Guselli at 16/04/2024 - 12:01
Ha Ha Ray,
unmitigated disaster
Yes that sums up UC.
Yes they don't let u do it till AFTER the date. Why? AAAAhhhhhhh. More awkward UC is for Landlords, the more we shy away from Benefit tenants. So easily solvable.
Yes annoys me this asking for tenancy lark. I've had 5 UC managers come round me in a Job Centre & say We're really sorry Mick, we've only had a weeks training.
Years later, the staff still ask for tenancy for proof of rent. 10 year old tenancy proves NOTHING on CURRENT rent.
Your whole text should be sent to MP's & Shelter to why Benefit tenants can't get houses any more.
Yes annoying how we give the rent increase then have to remind all tenants again on the date.
Great simple but detailed rent increase letter Ray.
14th May onwards Ray the UC tenants will be getting the new rates.
It's as bad in Nottingham.
Mick Roberts
15:27 PM, 20th April 2024, About 4 weeks ago
Reply to the comment left by Reluctant Landlord at 20/04/2024 - 13:31
As Bill says Reluctant, you got to give tenant rent increase.
If you charge £1 rent pm, UC will only pay £1pm.
If u charge £2000pm, UC will then pay the maximum LHA rate £700.
GlanACC
17:17 PM, 20th April 2024, About 4 weeks ago
Reply to the comment left by Mick Roberts at 20/04/2024 - 15:27
and if you were daft enough to sign a 1 years AST at LHA rate you will have to wait till it ends.
Mick Roberts
5:19 AM, 21st April 2024, About 4 weeks ago
Reply to the comment left by GlanACC at 20/04/2024 - 17:17
Yes & I've been daft enough to do many of that to keep the homeless sections happy. For years they wouldn't house anyone unless the Landlord agreed to the LHA rate. They would rather the tenant stay homeless costing £3000pm in hotel than let the tenant pay £50pm top up. They've backtracked on that now for about the last 3 years knowing the 10% of Landlord that would accept the LHA rate, won't any more.
Slooky
7:01 AM, 21st April 2024, About 4 weeks ago
I don't want to hijack this post but my daughter lives in one of my flats and is in between jobs. She has received her first personal payment, has received a 100% discount in council tax but she has been told she will not receive housing costs because I am her mother. When she writes in her journal to question or ask to appeal this she is told by the job centre that notes in her journal only go to the job centre and housing costs are nothing to do with them. She has also been told that they won't look at it again until her next assessment period. Any advice?
Mick Roberts
7:21 AM, 21st April 2024, About 4 weeks ago
Reply to the comment left by Slooky at 21/04/2024 - 07:01
Bill Irvine at UC Advice is your man to ask this.
From what I know, UC do allow family members to live in your places as long as proper contractual tenancy agreement and u WILL charge her rent if she can't afford ie. evict etc.
Ask for Mandatory Reconsideration.
Housing Benefit used to be very tough against it.
Bill irvine
8:10 AM, 21st April 2024, About 4 weeks ago
Reply to the comment left by Slooky at 21/04/2024 - 07:01
Hi Slooky
As Mick suggests, there is nothing to prevent your daughter from securing assistance with her housing costs. Despite this, I deal with refusals of HB and UC on an all too regular basis. It’s often claimed by both authorities, the tenancies are “contrived” to abuse the respective schemes.
In terms of UC, all she need do is, demonstrate she’s had a tenancy and paid the rent herself while working. She simply submits a Mandatory Reconsideration (MR) stating she wishes a reconsideration of the decision to refuse. Give some background to when the tenancy started and period of past payments. That should be sufficient to demonstrate there’s a genuine liability which is commercial in nature.
See one of my member bulletins https://universalcreditadvice.com/articles/housing-benefit-risks-associated-with-renting-from-close-family-members/ for some background. If she encounters further resistance, get in touch.
Bill
GlanACC
8:23 AM, 21st April 2024, About 4 weeks ago
Reply to the comment left by Slooky at 21/04/2024 - 07:01
Slooky, that was certainly the case a few years ago. I got round it by having the property in a LTD company name as a LTD company cannot have any 'personal' relationship with the tenant. Didn't have any issues with that