NRLA urges government to lift LHA freeze

Reply to the comment left by Lordship at 04/11/2025 – 15:58
I agree with RRB it possibly may take longer or they may even streamline it and make it easier . There was talk of a new Housing Court being formed some time ago.But where our views differ is in the likelihood of the tenant not paying .  The LHA is paid directly to me . I have some with guarantors and some not . That LHA rent though continues to be paid to me during the eviction process ( as one is currently – 6mths into the process and I’ve received every month £900 so £5,400 total ) . It doesn’t affect the tenant as it`s not `their` money . But a private payer could just stop paying overnight and even though they have a good job and a guarantor they may not pay up in `revenge` for being evicted and you would have to recover it maybe by court action through a CCJ  and get paid back at a snails pace amount . It may be a good guarantor and a homeowner but they may side with their tenant especially if family and not play ball . So you are down potentially £5,400 just on lost rent so far and the mortgage has to be paid etc etc . I agree if you have RGI that softens the blow and LHA probably wouldn’t get that ( but i do have RG through a 3rd party agency – another story ) When i last looked at RGI it wasn’t belt and braces though and you didn’t get it all paid out straight away but I am not up to date on the small print of those policies And in my experience ( and I am generalising here ) some private payers know how the system works quite well and won’t hesitate to use that and not pay and employ a solicitor against a landlord whereas some LHA tenants do not have the wherewithal  to challenge and just let the process take its course ( as mine is currently doing ) With regards to rent tribunals I don’t think LHA will  challenge mine unless I  go above the LHA rate. I don’t do that unless they are part working perhaps but usually its a straight whatever LHA rate is applicable  . So that is really more a problem with the private tenant again who may be more switched on and abuse the system by appealing knowing that buys them time So as before its a difference in our perceptions of risk So in summary my view is 1. If the rates dont stack up  then yes don’t entertain LHA on affordability grounds 2. If the rates stack up and you can like I do get an extra £100 – £300 pcm potentially then go for it but only perhaps if like me you  do not perceive the risk to be as bad as you first think  . ( I advise clients and source properties for budding investors. Some initially were very anti LHA but after a few sessions they warmed to it when i discussed the figures and the risks . I sourced 15 predominantly LHA properties  for one client and he never looked back ) So for me  its down to the robust  tenant selection based largely on their personality and sense of honesty and trustworthiness and the fact that if it does go wonky  the government is a good payer who still pays me direct even if an eviction has to take place  and they tend to stay put longer than a private tenant so eviction is less likely and they stay 10 – 20 years maybe – so happy days all round 

Well, I disagree some of your points here! (no surprise)
But I do agree with you on tenant selection. Perhaps you misunderstood me to say I would just take on tenants in well paid jobs, with assets and good credit etc. There’s more to it than that. I am very particular who I take and much like yourself, I do thorough research! I would not need to explain to future tenants the issues they would have if they decided not to pay for no reason. They would realise the consequences of a damaged credit file, having assets seized, reputation damaged, etc.

Although I have taken out RGI recently, I agree that you only know how good it is when you need to claim. Never had it in the past, but having spoken to two other landlords who have claimed, I went on a recommendation.

If your getting the LHA paid direct, then this must be because of arrears, or the tenants inability to manage their finances, or some other issue that could indicate they may have behavioral or mental health issues. To me that type of person is a higher risk. Fair play to you for taking these people on, but I don’t want to be dealing with this additional stress.

Where as in the past I was looking for tenants who wanted long term and the longer the better, now I’m changing my approach. The reason is, I have tenants who are paying in some cases 15% below the market rent as a result of their long tenure and although they are great and I have no issue with the rent they pay, any new tenants I take on as I say, will probably be looking to buy themselves one day, so won’t want to rent for decades. Would be easier to keep pace with market rates then also if your changing every 3 or 4 years perhaps.

But anyhow, as we have discussed before, the whole LHA route needs to stack up on the type of property you are renting and on mine it would not work. As I have said, it’s not an area I’d be happy being involved with because of my personal issues with it. There maybe landlords like yourself operating in this market, but I would have said it was a niche area which is why generally now you are hearing that going forward as a result of the RRB, landlords are/will become very selective with who they take on.

On the other hand perhaps this conversation could lead to others, who may have been following, moving in to this area on the basis of what you have said and don’t have any moral issues with it. Good luck to them.

Reply to the comment left by Lordship at 11:29

“If you’re getting the LHA paid direct, then this must be because of arrears, or the tenants inability to manage their finances, or some other issue that could indicate they may have behavioral or mental health issues. “

They automatically go into arrears immediately Day 1 really because LHA is paid in arrears and the AST requires them to pay in advance – The LHA old system back in the day used to allow direct payment simply if the landlord requested it. There was nothing to evidence, you just ticked a box . Both parties were happy . It worked well.  UC changed all that and yes created these extra criteria to be satisfied as the gov wanted to help them manage their money in case they got a job . That of course may be  admirable in principle but totally misguided  in practice as it’s setting many of them up to fail . 
If they haven’t been taught money management  skills by their parents or at school why should the landlord be treated as the guinea pig in a social experiment to see if they can manage  . And  the Gov are hypocrites . When I worked at a job and got a wage HMRC didn’t want to afford me the courtesy of helping me try and manage my own finances . No, it didn’t  trust me one iota to pay my own tax bill so they  insisted the employer deduct it at source.  So their reasoning is BS . Imagine they let all wage earners pay their own tax . A bureaucratic nightmare and the country would go bankrupt as the excuses would pile in like they do with some tenants . Sorry I can’t pay my tax as  my dog was ill and vets are expensive  / it’s my little Chelsea’s birthday and we just have to hire  a bouncy castle and do a £300 spread to keep her and her 20 friends happy / oh sorry but its Christmas and i got presents galore to buy so can i pay 50% tax in December  and then catch up in Jan / Feb etc etc 
I had a good tenant on direct payment to me on LHA for 2 yrs –  she was a self confessed alcoholic though . On transitioning  to UC she begged them to carry paying  me direct as she feared a relapse if it went to her . But the cruel uncaring shortsighted DWP categorically refused . No no no we want to help you manage your money, they said .  So she got the first £600 weakened and went on a bender and ended up in hospital with her stomach being pumped out . Nearly died . The DWP only then said …oh dear –  we better pay you direct then. It’s a farce 
So I dont set them up to fail I discuss those qualifying criteria with the new ones and tell them that story  and they are more than happy to tick the bureaucratic boxes required so I get direct pay each time at the outset 
And yes again on the risk factor  – we dont see eye to eye on it as its  subjective . So all my effort is put in at the beginning to set it up right . I value my time at say £100 an hour . So 3 hrs extra work to get the right tenant and the extra enhanced rate in the first month. Then 11 mth x £ 300 extra = £3,300 pa which is my bonus for those 3hrs. I dont see it as a risk in the same as others do,  but appreciate fear of the unknown is a contributing factor   

“On the other hand perhaps this conversation could lead to others, who may have been following, moving in to this area on the basis of what you have said and don’t have any moral issues with it“

Yes there may well  be . Many of my clients have come to me on reading my rantings to explore it more and how it could work for them. And the moral issue is often then seen as maybe a different perspective of how you see it . Many do it because they actively want to mix business and helping vulnerable people. Its sits nicely with their life plan   and gives them good karma I think also it is morally a good thing to do  to house a homeless person  in a better home that they were living in the night before.
I`m basically a capitalist who’s also booking my room in  heaven 🙂

Perhaps because of the high housing the homeless gives you, you won’t be unable to ever stop! Be careful, you may end up in heaven to soon!