LHA Increase to trigger rent increase?

LHA Increase to trigger rent increase?

13:00 PM, 22nd April 2020, About 2 years ago 35

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I note that the LHA rates have been increased from 1st April 2020 – March 2021. A couple of questions…

1. Anyone know if this is ONLY a temporary measure only till March 2021, what happens after this? Will it stay at the same level going forward, or is this increase only because of Covid-19 and therefore after March 2021 there will be a reduction to another (lower) rate?

2. Are any landlords now upping their rents in light of this LHA increase going forward?

I appreciate the delicacy of the current situation, but I think its a valid question!

Many thanks

Reluctant Landlord



Comments

by Mick Roberts

12:31 PM, 26th April 2020, About 2 years ago

Reply to the comment left by SimonF at 26/04/2020 - 02:21
Good words Simon on the cap.
I've just had my first one that's capped switch onto UC, with HE payment direct to me. I asked her if all her money ok, she says Yes. But I think with the switch & 4 weekly to monthly, & more rent to me now with the rates gone up, it must be lower for her, but she's not noticed it.
This is one good thing with UC, when they are benefit capped, it don't come out the 'Landlord's money' any more which I always thought was ridiculous as what did the tenant learn from that on the previous system? They was still getting same money & this then caused disagreements Landlord trying to persuade tenant their 'rent' money has gone right down cause of cap.

by Bill irvine

13:35 PM, 26th April 2020, About 2 years ago

Hi Simon

You're quite correct to point out that not all tenants benefit from the rise in the LHA rate to the 30th percentile and, in fact, can find themselves worse off, if their landlord increases the contractual rent to the newly published figures.

Many of my clients in inner or greater London have highlighted to DWP, CPAG etc. cases of tenants being left with much less than they should have, when the full LHA rate is paid direct to their landlord, due to a Managed Payment being in place. The cap in these cases is deducted from their UC, Standard Allowance (designed to pay for food, heating, household bills etc) and not the "housing costs" as it still does under Housing Benefit.

However, if we set aside the London and more expensive rental districts, overall the Benefits Cap has had very little impact elsewhere in the country, although the recent restoration of 30th percentile will increase its impact.

For example, see DWP's analysis at May 2019
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/831148/benefit-cap-statistics-may-2019.pdf

Bill

by SimonF

15:15 PM, 27th April 2020, About 2 years ago

Reply to the comment left by Bill irvine at 26/04/2020 - 13:35Hi Bill
Just a quicky. We usually serve section 13 notice on rent increases. We have obviously not served these notices on LHA tenants as we were not aware of this big increase. So question is 1. Do we have to serve section 13 and then give 1 month notice to increase or can we increase without serving notice and just let tenants and UC know of increase? 2. and this has always bugged me. If we serve a section 13 on a tenant and tenant says they dont want to pay increase what happens then? Does the section 13 give tenants an option to refuse increase and rent to remain? I have a tenant who is clever. She is getting rent money from UC and every month pays some money to us and pockets rest but she makes sure she never reaches 2 months arrears so that we cant request direct payment. I would like to increase her rent to new level and get her that way. What you think?
Cheers and keep safe
Simon

by Bill irvine

17:12 PM, 27th April 2020, About 2 years ago

Reply to the comment left by SimonF at 27/04/2020 - 15:15Hi Simon
Invariably landlords need to issue formal notice of the proposed rent increase, allowing 1 month before implementation. Your tenant has the right to appeal your decision but must produce credible grounds. Given the LHA rates where frozen for 4 years and the new figure represents a rent in the lower 3/10ths range, I wouldn’t anticipate a problem re the level of charge. If your tenant fails to notify the DWP you could do so, following the methodology mentioned in my earlier posts.
Bill

by SimonF

20:29 PM, 27th April 2020, About 2 years ago

Reply to the comment left by Bill irvine at 27/04/2020 - 17:12
Thank you Bill. Just realised original tenancy agreement states rent to be paid monthly on 23rd of month which is date tenancy commenced however a number of years ago tenant asked us to switch payment date to 10th due to her wage cycle. She paid rent to the following 10th and has since always paid on 10th. We changed her rental periods on our program to bill 10th to 9th.Coming now to serving section 13 are we dating increase from 23rd which is date of commencement and payment date according to AST or 10th which is current payment cycle? Cheers Simon

by DSR

18:48 PM, 13th May 2020, About 2 years ago

Reply to the comment left by SimonF at 26/04/2020 - 02:21
Hi Simon, Could you explain the 'cap' part under the UC system please? For my existing HB tenants rent increases have been done, but I've not dealt with UC before on this issue. How do I find out the 'cap'? If I can get a figure I can work out if increasing the rent is going to have a direct effect on them or not before I do it. Thanks

by SimonF

20:18 PM, 13th May 2020, About 2 years ago

Reply to the comment left by WP at 13/05/2020 - 18:48
Hi WP. If your tenant is in receipt of working tax credits or net wages are above £569 per month then they will not be affected by the cap. If tnt does not fall in to above category then amount of cap will depend if in greater London or rest of UK and if any children on claim. If you give me more info I will give you exact figures. "Stay alert stay safe"
Simon

by DSR

20:19 PM, 13th May 2020, About 2 years ago

Reply to the comment left by SimonF at 13/05/2020 - 20:18
Thanks - I;ll find out all the detail and get back to you. Much appreciated 🙂

by SimonF

12:57 PM, 20th October 2020, About A year ago

Reply to the comment left by Bill irvine at 23/04/2020 - 16:13
Hi Bill. I wander if you can assist. We have a UC tenant occupying a studio flat in West London since 2017. We have never increased rent till earlier this year when we served a section 13 notice increasing the rent to the new 1 bed LHA rate. We receive the housing costs direct due to past arrears. On your advice we sent a copy of the notice to UC and they then increased rent to the new rate. The tenant made an application to the tribunal fighting the increase and we now have a video hearing set for Thursday. I am just gathering my evidence and am wandering do i need to provide evidence showing that market rent is in line with new rate which may be a struggle due to it being a studio or is the fact that UC is paying the new rate enough of an argument. Furthermore i read on the Citizens Advice website that in order to fight a Section 13 notice a tenant must still be paying the old rate. Once he has started paying the new rate he can then no longer fight the increase. Is the fact that we are being paid the new rate from UC an argument to say that tenant claim is invalid? Thank you for advice

by DSR

13:14 PM, 20th October 2020, About A year ago

Reply to the comment left by SimonF at 20/10/2020 - 12:57
I can't understand why he objected in the first place if he isn't paying the increase anyway (assume UC paying all the rent or have I misunderstood this?)

Interesting point on the bedsit/studio V one bed flat part though so I would be interested as to how these are categorised as far as LHA goes....


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