Benefit changes for landlords

Benefit changes for landlords

The Government has made a number of changes to the way Housing Benefit (HB) is calculated. These changes took effect from 1 April 2011 and will affect most private tenants whose HB is worked out using Local Housing Allowance (LHA) rates.

The amount of HB your tenants get may go down. For tenants who are already getting HB, the amount they get may change when we review the Local Housing allowance (LHA) rate applicable to their claim after April 2011. When this will affect your tenants' benefit will depend on their specific circumstances and we are writing to individual tenants from February 2011 to let them know how they are likely to be affected.

In addition, from April 2015, we will have more discretion to pay HB directly to you. We can only consider doing this in very specific circumstances where it would help the customer secure a new tenancy, or remain in their current home at a reduced rent.

What exactly are the changes?

The following took effect from 1 April 2011:

  • there is a maximum Local Housing Allowance rate 'caps', so that weekly LHA rates cannot be more than:
    • £250 for a one bedroom property
    • £290 for a two bedroom property
    • £340 for a three bedroom property
    • £400 for a four bedroom property
  • these caps will probably only affect tenants if they live in London
  • there will no longer be a five bedroom Local Housing Allowance rate. The maximum level is for a four bedroom property  
  • all local Housing Allowance rates will also be reduced to a lower amount, so that about three in ten properties for rent in the area should be affordable to people on HB. At the moment about five in ten properties in each area are affordable to people receiving HB. Existing claimants will have some degree of protection with any reduction delayed until nine months after their LHA anniversary date.

If you want to know what the Local Housing Allowance rate is now, visit the LHA Direct website. These rates change every month so keep checking.

Rent Officers in England and Wales are also publishing 'Shadow' LHA rates showing what the equivalent lower LHA rate would be (at what is called the 30th percentile) rate. You can find this information for all areas in England on the VOA website.