Forms and procedures for LHA Landlords

Forms and procedures for LHA Landlords

15:43 PM, 16th March 2012, About 12 years ago 49

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LHA Top Tips for landlords. Article 4 in a series of 8
The most important things are that you need everything in writing; you need to keep it clear and simple for the tenant and you must understand timings.

  1. Before you offer any tenant your property let them know that you would like to use a tenant referencing agency to do a basic background search. A number of free services exist and you can find some of these tenant referencing services in the Property Services Directory at
  2. Not all tenants will be familiar with the claims procedure and complex forms or long interviews will put off many tenants. Simplify any forms you have, both in layout and wording, be prepared to explain when paperwork must be completed to secure the tenancy and offer to help with completing the forms.
  3. Produce a standard list for the tenant of the information you will need them to provide to complete their application. Proofs of identity, NI number, banking details etc.. to enable you to reduce delays in submitting their application. The council will advise what they are likely to require.
  4. Ensure that the tenant understands their obligations with regard to giving notice on their current home and if appropriate obtain a Housing Benefit overlap form from your local council. This can be paid for up to a maximum of four weeks where an overlap is unavoidable.
  5. It is always preferable to have rent paid direct to you rather than via the tenant. Explain to the tenant that you will seek direct payments so any information they can offer to help with this would be appreciated; for example evidence of a medical condition or debts.
  6. Once you have decided which prospective tenant you want you will need to contact the council and give them the composition of the family, ages and their income details to get confirmation of what LHA rate they qualify for. Don’t forget you will already have an idea as to what rate the tenant qualifies for, but this will confirm it. Always ask for the confirmation to be emailed so you have a copy in case of any problems. If the tenant only qualifies for the single bedroom rate but it is a two bedroom property, try applying for a Discretionary Housing Payment, which is a fund that allows the council to top up any Housing Benefit. It cannot be used to pay off arrears. For the council to allow this the tenant must be vulnerable and at risk of not getting the property, also the rent cannot be higher than the LHA rate for that property.
  7. You can submit a claim for Housing Benefit up to 13 weeks prior to a tenancy start date. The sooner this process is started the more margin you have for unexpected delays. It is worth stating on the paperwork that it is an “Advanced Claim”.
  8. Always ask your prospective tenant to sign a declaration that states you can contact the council about your tenants’ circumstances that relate to the property. The council may otherwise refuse to speak directly with you due to the Data Protection Act.
  9. If there is likely to be a rent top up required from the tenant make sure they understand how much, when it will need to be paid and that you will require this to be done via a standing order. This will hopefully prevent any problems at a later date. If you are intending to use a letting agent they can ensure that payments are set up as a direct debit.
  10. Contact the council to ensure that there are no overpayment claims pending for your tenant which may affect ongoing payments or affect the tenants ability to afford top-up rent where due. When dealing with some councils this is not an option as the length of time it takes to get an answer could be weeks, by which time you could have lost the tenant. Always try though.

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Ben Reeve-Lewis

10:24 AM, 19th March 2012, About 12 years ago

Morning Mark,
No I cant believe that. Pimlico is a well moneyed up area and there is an LHA cap of £400. There are transitional provisions that allow people a little rollover time that may account for it at the moment but this is fast running out.
I would imagine that a rent of £1,500 in Pimlico would get you very little. A shed perhaps 🙂
Nick? Whaddya think?

Mark Alexander - Founder of Property118

11:54 AM, 19th March 2012, About 12 years ago

Ben, I have emailed Nick Parkin inviting him to comment.

I've also found his original comment on Property tribes and the gap on the figures is even bigger than I recollected. The link is -

Quote from Nick Parkin on Property Tribes forum - "No joke - LHA on a 2 Bedroom Flat in Pimlico is £2150, I've got several rented out between £1300 & £1500 pcm & a 3 bed rented out at £1100 pcm.
There are loads of Council Flats bought under Right to Buy & then rented out under LHA - the owners retire to Norfolk or Sussex on the proceeds, I'm surprised you don't know some. Until the Govt changed the AST rule most of these tenancies were common law because they exceeded the £25K AST limit (changed Oct 2010), so no hassle with deposit schemes & eviction problems either.
The history of LHA is fascinating, the Government thought they could shaft the PRS by offering tenants £5 to negotiate their rents down, and ended up being shafted themselves."

Further quotes from subsequent posts, same thread ......

Mark Alexander said: "I'm not familar with any of this, please share more details. What was the £5 bribe all about and how did it backfire?"

Nick Parkin responded "Plan A (1990s) Tenant Rents House. LA pays Rent to LL. Everyone happy.
Plan B (Government gets greedy) LA pays rent to tenant. Tenant negotiates a lower rent with LL, and gets to keep £5 of the reduced rent. In theory the Government saves money from the lower rent the tenant negotiates.
Plan C (What happened in practice) Tenant receives rent. Unilaterally negotiates 100% rent discount by not paying rent over to LL. LL increases rents to cover bad debts. LHA rates go through roof."

Ben Reeve-Lewis

12:10 PM, 19th March 2012, About 12 years ago

I just went on the VOA website where you can find the latest LHA rates based on a postcode. Pimlico is SW1W and I added 8PB as a typical street address and found the LHA rates for March 2012

 Shared Accommodation Rate:
£123.50 per weekOne Bedroom Rate:£250.00 per weekTwo Bedrooms Rate:£290.00 per weekThree Bedrooms Rate:£340.00 per weekFour Bedrooms Rate:£400.00 per week
I'm not aware of the £5 bribe being part of either the reason for LHA cuts or how it worked in practice. Tenants were previously allowed to keep any difference between the true rent and the LHA rate and then it was capped to only £15 above the true rent

Mark Alexander - Founder of Property118

12:18 PM, 19th March 2012, About 12 years ago

Thanks for the clarification Ben. It would appear that Mr P was either ill informed or that his comments were just BS then?

Ben Reeve-Lewis

14:39 PM, 19th March 2012, About 12 years ago

Or the situation was a while back before the LHA caps kicked in. There are, as I said thetransitional provisions, that pay more for about 9 months after the cap came in, depending on the anniversary date that the tenant moved in on  but I think all of those run out by September time, so every tenant will be under the cap by then

Jonathan Clarke

15:48 PM, 19th March 2012, About 12 years ago

Paul you said in relation to UC  .....
``There will be no ring-fencing of housing benefit.``That`s a fairly sweeping statement in my book. Where did your evidence come from for that  please. I thought it had yet to be decided
Ah but then you said .....
``I know so little about UC that I intend to avoid anyone who may have to be on it.`` 
I get confused with what you know and what you dont know.
You also said .....
``I do not have an inbuilt aversion to LHA investmentHowever my dealings with LHA claimants have been such that I would not with to touch them with a bargepole.`` 
Maybe a slight contradiction there perhaps! 

Mary Latham

17:35 PM, 19th March 2012, About 12 years ago

To be fair to Paul all the indications are that there will be no ring fencing of anything generally since the UC is designed to "empower" people to manage their own finances with less.  We expect that there will be certain vulnerable groups who may be given more "support" and this might include some ring fencing but overall the UC will be a single purse including all benefits but capped at a max amount, which will be less than they are getting at the moment

I am working on the basis that it will be the norm for those on benefits to be paid one amount and this is why Credit Union accounts will help landlords by setting up automatic payments of rent that will be taken from the UC when it hits their account.  My guess is that the utility companies will also insist on this which will help landlords to be seen as another service that must be paid for.

You are right Jonathan it is very much still in the melting pot but we need to be realistic the Government have an aim and while minor details may vary the overall aim will remain the same - one purse of money capped paid to the claimant

Ben Reeve-Lewis

18:19 PM, 19th March 2012, About 12 years ago

Well said Mary. we are a long way from a clear understanding of how UC will work in practice, other than we know social landlords are going to be subjected to payments direct to tenants and whereas PRS landlords can opt to not rent to benefit claimants, social landlrods have no such flexibility and this has the potential to be a complete disaster.

Also I read today that Westminster council are opting to raise council rents for tenants earning slightly over £60,000, to 40% of their income, so what? £2,000 a month (Help me out here guys, I have number blindness) Not a bad wage I hear you say, but this is total household income. So a married working couple on an aerage wage with a working 18 year old child may well tip them over the limit, meaning they lose the family home.

Big changes afoot and they aint over yet.

And what is with you guys on this thread? Handbags at dawn? haha I am the enemy to most but I post here because you guys always help each other out. Draw your claws in people

Mary Latham

18:47 PM, 19th March 2012, About 12 years ago

Oh I love it when you are masterful Ben hahahahaha

I am going to post a new thread Ben so that you and I can have a discussion about Universal Credit without pinching JP's great thread that I know will help many landlords who deal with LHA tenants.  Many landlords are concerned about how UC will impact on their business.

Ben Reeve-Lewis

19:08 PM, 19th March 2012, About 12 years ago

UC? Jeez, this is an open book if ever I saw one.

It aint finalised enough to really allow us to grasp what it means yet. Government talk of their aversion to social engineering, using a top down socilaist model to define what it is, but the top down down, market forces approach, is exactly the same thing, it just has less predictable qualities.

I'm an old socialist hand, member of Militant in the late 80s early 90s who doesnt believe in that as a solution anymore, although I do have a bee in my bonnet about social injustice, I think, in housing terms that any solution that doesnt include the interests of landlords too will always just be so much pointless placard waving.

Yeah. UC is the next thing that landlords, tenants, social lanldords, enforcement officers like me, need to really get to grips with. The landscape is being totally re-written. Shouting slogans from behind barricades will not help

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