Real rents v LHA rents – info request

by Readers Question

9:40 AM, 24th November 2015
About 4 years ago

Real rents v LHA rents – info request

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Real rents v LHA rents – info request

I am always astounded by how much more the real market rents are compared to the LHA (Local Housing Allowance) rates. It appears to me that the LHA rates must currently be based on unreal very low rents, because when I look on Rightmove or other lettings websites at the rental figures, there is perhaps only one out of every hundred rental properties that is available at or below the LHA rate.rent

Having checked how the LHA rates are calculated, it appears to me to be based on a very narrow range of properties, because most landlords do not submit rental information to the VOA (Valuation Office Agency) who collate the figures. I would therefore urge ALL private landlords to submit rental figures to the VOA so that the LHA can be calculated based on real rents from as wide a range of landlords as possible (not just those who usually let to LHA tenants).

This is very important for both landlords and tenants, as it determines the levels of Housing Benefit payable to households (and thus the amount of rent that they can afford to pay to landlords). This can often be the difference between keeping up rent payments and keeping a home, or falling into arrears and becoming homeless.

My local VOA officer has said that I can give his contact details on the website for landlords to submit rental details to: philip.j.ashford@voa.gsi.gov.uk

The basic information required is the address of the property, how many bedrooms it has, and the rent being charged.

Thanks

Robert



Comments

Robert Mellors

11:46 AM, 15th July 2019
About a month ago

The Local Housing Allowance (LHA) rents are based on the Valuation Office Agency's (VOA's) database of rents for the Broad Rental Market Area (BRMA). The data that goes in to the VOA's database is the rental data (rents charged) for each LHA category (number of bedrooms). However the VOA does not scour the letting agents websites to find the rental data, but instead relies on letting agents and landlords to self-report the rental data to them.

Unfortunately mosts landlords and letting agents do not bother to do this, so their rental data cannot be included. This means that the only rental data being counted, is the rental data that is being declared to the VOA, but as most landlords do not bother to declare the information, then the VOA's market rent figures could be very skewed or out of date.

Where there is a low number of properties of that type in the rental data, then reporting the rents for even a few properties could make a big difference to the average rent for that property type. For example, in my local BRMA there are only a few dozen rent data entries for rooms in shared houses, so if a HMO landlord with say 20 rooms were to report the rents then this could significantly affect the average market rent for that BRMA area.

Although the HB (LHA) rates have been frozen for several years, the difference between the LHA and the current market rents has been increasing, but the amount of difference can only be shown if many more landlords declare their market rents to the VOA.

I have reported mine in the past simply be sending the officer at the VOA an email with the rents achieved clearly stated for each property address (listed in a spreadsheet format). Regardless of how many properties a landlord has, if the rental information is provided to the VOA, then the VOA should include it in their database of market rents.

Jonathan Clarke

12:45 PM, 15th July 2019
About a month ago

Reply to the comment left by Robert Mellors at 15/07/2019 - 11:46
Thanks Robert that`s good detail . So the small guy can make a difference it seems. I do find it very strange though that the VOA has nothing formal in place to test the accuracy of their figures but just relies on it seems a haphazard system of reporting . It leaves itself open to misinformation being sent in with the intention of perhaps aiming to distort the figures either up or down. Surely for such an important stat they should have a robust evidence based system for scrutinising their decision making process rather than a random bloke who has 20 rooms in a population of what could be what 500,000 people

Old Mrs Landlord

15:13 PM, 15th July 2019
About a month ago

In the town where we have two-bedroom houses to let there is a shortage of two-bed houses and an oversupply of two-bed flats, meaning that the houses command comparatively much higher rents. However assiduously the landlords of two-bed houses report their rents the data will always be skewed by the imbalance of supply, meaning benefit claimants will have little hope of being able to afford a house and garden.

David Lovegrove

15:28 PM, 15th July 2019
About a month ago

I have now traced a form published on 1st April 2014 by the VOA headed local housing allowance and statistics on private rental levels that can be used by individual landlords.

Monty Bodkin

16:02 PM, 15th July 2019
About a month ago

Reply to the comment left by Old Mrs Landlord at 15/07/2019 - 15:13
The form asks "property type" along with other information about the property.
Maybe it is weighted to some extent.
Which doesn't necessarily mean benefit tenants get a house with a garden if there aren't any in the area at the lowest 30th percentile (priced at the time of the freeze).
Same as they don't get a detached house with grounds and a pool.

Old Mrs Landlord

16:56 PM, 15th July 2019
About a month ago

Reply to the comment left by Monty Bodkin at 15/07/2019 - 16:02
I was told by the Local Authority that the LHA rate is by number of bedrooms and other considerations are not taken into account. Thus tiny studios converted from rooms in a large house, with an Elfin kitchen in one corner and a shower and lavatory behind a stud partition in another, are rated the same as a spacious one-bed apartment with no communal areas, separate fully equipped kitchen and living room, its own street door, garden and parking space.

Monty Bodkin

17:09 PM, 15th July 2019
About a month ago

Reply to the comment left by Old Mrs Landlord at 15/07/2019 - 16:56
Yes, I agree from the local authority's viewpoint.
But they get their figures from the VOA who do ask for other information about the property so maybe they weight their figures? Or maybe they are just collecting data for other purposes.

David Lovegrove

17:25 PM, 15th July 2019
About a month ago

Reply to the comment left by Robert Mellors at 15/07/2019 - 11:46
I suspect it is mainly the local authority that provides the figures ,presumably from the rental agreements that they ask of us.
These are likely to be benefit claimants and as you say if numbers reported are low they could be improved if those letting to working tenants reported their figures .
You can check the reported number of rentals (by bedroom) in your area from the publication made by the VOA on 7th May 2019 - local housing allowance list of rents - list of rents used for LHA rates April 2019 to March 2020

Monty Bodkin

17:48 PM, 15th July 2019
About a month ago

Reply to the comment left by Old Mrs Landlord at 15/07/2019 - 16:56
The VOA take this into consideration;

Variety of property types and tenures

The requirement is straightforward and requires rent officers to ensure that an area contains an assortment of property types (e.g. houses, flats, bungalows, terraced, semis, detached, purpose built and converted).

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