Real rents v LHA rents – info request

Real rents v LHA rents – info request

9:40 AM, 24th November 2015, About 8 years ago 50

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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


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Comments

Monty Bodkin

17:56 PM, 15th July 2019, About 5 years ago

Reply to the comment left by David Lovegrove at 15/07/2019 - 17:25
I don't think it is David. Benefit rents are taken out where possible as they skew the figures;

https://www.gov.uk/government/publications/local-housing-allowance-list-of-rents
How Local Housing Allowance rates are calculated
The Valuation Office Agency (VOA) Rent Officers collect rental information from letting agents, landlords, tenants and other sources. LHA rates are based on private market rents being paid in the BRMA which can differ from advertised rents.
These data do not include all rents that might exist in each BRMA. In accordance with DWP legislation, Rent Officers are tasked with collecting a sufficient sample from the 12 month period ending 30 September prior to DWP publishing LHA rates on 1 April. These published data are the rents collected and comprises both new and renewal rents in payment, as negotiated between landlord and tenant. These rents do not include any value attributed to services which are ineligible for housing benefit (effectively net rents). Housing benefit supported rents are also removed where possible.

Monty Bodkin

18:26 PM, 15th July 2019, About 5 years ago

Reply to the comment left by Jonathan Clarke at 15/07/2019 - 12:45
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 .

Hello Jonathan,

I reckon without too much effort you could work out going rents in your area to within a tenner or so.
The VOA are supposed to go on rents achieved, not just asking rents. But a look at Rightmove, Zoopla, rent ads etc and looking at the time a property is on the market gives a fair idea. Cross reference that with the info from time trusted letting agents and landlords and you'd be pretty close.

Existing rents is a bit harder to establish, especially now with landlords having to change the way they do business. Stick your finger in the wind and take a best guess. 5% below new rents?

I agree though, all seems a bit haphazard.

Monty Bodkin

18:35 PM, 15th July 2019, About 5 years ago

Reply to the comment left by Monty Bodkin at 15/07/2019 - 18:26
And if you look into the 'methodology' the VOA used to assess council tax banding, the above is cutting edge science by comparison!

Jonathan Clarke

19:13 PM, 15th July 2019, About 5 years ago

Reply to the comment left by Old Mrs Landlord at 15/07/2019 - 16:56
This is true . I have a small ex LA studio @ 550 and a large posh 1 bed @ 750 . Condition /location / spec does not feature at all in the rate set . The studio / 1 bed LHA rate is the same @ 557 for over 35`s . Under 35`s only get 302 pcm so they dont get a look in which is ageist. At the other end 4 beds are a good investment as for just a 6` x 7` space for the extra bedroom I would get an extra 231pcm
But on a pro rata rate they were not much more than a 3 bed to buy so investing in a 4 bed made more sense . The whole system is fairly crude so I adapt my strategy to maximise the weaknesses in it

Troydave

19:34 PM, 15th July 2019, About 5 years ago

And should a 2 bed house and a 2 bed flat for example receive the same LHA rate?
In my local district the housing association have sold the freehold of a number of blocks of flats to private investors and the new freeholder has increased service charges per flat from around £50 to £150/ month !
Meanwhile LHA rate remains frozen and newly transferred UC claimants struggle to pay the rent.

Monty Bodkin

19:37 PM, 15th July 2019, About 5 years ago

Reply to the comment left by Jonathan Clarke at 15/07/2019 - 19:13
Condition /location / spec does not feature at all in the rate set .

That's the salient point here, you are setting the rate, they need a spread of properties within the same broad category.

Troydave

19:46 PM, 15th July 2019, About 5 years ago

Reply to the comment left by Monty Bodkin at 15/07/2019 - 17:56
I believe the 'other sources ' Monty are those provided by local authorities. If you exam tables 2.1-2.6 there is a surge in the numbers submitted during the same months each year.
I am assuming those increases represent local authorities submissions.
Having printed the 4,000 or so rentals in my district many of the rents listed are listed at or even below the LHA rate (benefit rates).
It may be different elsewhere.
My BRMA covers more than one local authority and I am having difficulty at present in Identifying the boundaries of each of the BRMA areas (around 150 ).

Jonathan Clarke

20:14 PM, 15th July 2019, About 5 years ago

Reply to the comment left by David Lovegrove at 15/07/2019 - 19:34
Yes they do . But one could argue they shouldn't perhaps
The rate goes with the person though not the property.
So one LHA strategy is a mum and a small baby in a studio and you get the 2 bed rate for that . Each person is given a bedroom entitlement depending on ages / sex of children etc . It gets more complicated with other factors . For instant social services say step children may not share sometimes at certain ages whereas if blood brother / sisters they can . Age 10 is a cut off point for different sexes sharing . Also I have a couple of children diagnosed with ADHD and require their own bedroom and cant share with siblings

Jonathan Clarke

20:18 PM, 15th July 2019, About 5 years ago

Reply to the comment left by Monty Bodkin at 15/07/2019 - 19:37
Yes their `broad` is far too broad and tries to lump a whole hotch potch of different size/type of properties into the same band . In the old days this is when the valuation officer could give a more bespoke service . That was expensive though so they streamlined it for more of a one size fits all system . That has benefits and drawbacks depending on ones angle

Troydave

20:27 PM, 15th July 2019, About 5 years ago

Reply to the comment left by Jonathan Clarke at 15/07/2019 - 20:14
I was assuming both the house and the flat contained the same mix of tenants.
The LHA rates would be the same , perhaps they should be I don't know. However in the case of the flats I was describing, service charges have increased by £100 which is outside the control of the leaseholder (landlord) yet none of this is recoverable under the LHA rates.

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