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Nuneaton & Bedworth Borough Council,
Town Hall, Coton Road,
Nuneaton, Warwickshire,
CV11 5AA
Town Hall, Coton Road,
Nuneaton, Warwickshire,
CV11 5AA
Tel: 024 7637 6376
Local Housing Allowance Overview
What is Local Housing Allowance?
Local Housing Allowance (LHA) is a new way of working out Housing Benefit if you pay your rent to a private landlord. After successful pilot schemes in several councils since 2003, the national version of the LHA will be introduced in all local authorities from April 2008.
If you rent from a Housing Association or the Council, you will still claim Housing Benefit as now.
There will be no changes to the entitlement rules - benefit calculations will still be based on your income, savings and a valid tenancy agreement.
The idea of the new LHA is to be fairer, to simplify the rules and to allow tenants more freedom - both financially and to choose where they live.
How does LHA differ from Housing Benefit?
LHA is a flat rate allowance towards rent costs, based on the area where you live and the number of people who live with you. This means that The Rent Service will not need to look at every property to decide on the amount of rent that is eligible for Housing Benefit.
This will mean that tenants living in the same area with similar circumstances will receive broadly the same amount of benefit - currently, if you live in a smaller, less attractive property, you generally receive less benefit than someone who lives in a larger or more attractive property in the same area, even though your family size and needs may be similar.
LHA will normally be paid directly to you, and you will then pay your rent to your landlord. There are however safeguards in place so that a landlord may be paid directly in certain cases - this will protect vulnerable tenants.
Who will be affected by the Local Housing Allowance?
LHA will be used to work out benefit entitlement for all new claims received from April 2008, unless you fall in to the list below.
LHA will also apply if you are already on housing benefit, but move home and claim benefit at your new address from April 2008, or if there is a break in your existing claim of a week or more.
LHA will not apply if you:
Local Housing Allowance (LHA) is a new way of working out Housing Benefit if you pay your rent to a private landlord. After successful pilot schemes in several councils since 2003, the national version of the LHA will be introduced in all local authorities from April 2008.
If you rent from a Housing Association or the Council, you will still claim Housing Benefit as now.
There will be no changes to the entitlement rules - benefit calculations will still be based on your income, savings and a valid tenancy agreement.
The idea of the new LHA is to be fairer, to simplify the rules and to allow tenants more freedom - both financially and to choose where they live.
How does LHA differ from Housing Benefit?
LHA is a flat rate allowance towards rent costs, based on the area where you live and the number of people who live with you. This means that The Rent Service will not need to look at every property to decide on the amount of rent that is eligible for Housing Benefit.
This will mean that tenants living in the same area with similar circumstances will receive broadly the same amount of benefit - currently, if you live in a smaller, less attractive property, you generally receive less benefit than someone who lives in a larger or more attractive property in the same area, even though your family size and needs may be similar.
LHA will normally be paid directly to you, and you will then pay your rent to your landlord. There are however safeguards in place so that a landlord may be paid directly in certain cases - this will protect vulnerable tenants.
Who will be affected by the Local Housing Allowance?
LHA will be used to work out benefit entitlement for all new claims received from April 2008, unless you fall in to the list below.
LHA will also apply if you are already on housing benefit, but move home and claim benefit at your new address from April 2008, or if there is a break in your existing claim of a week or more.
LHA will not apply if you:
· Pay your rent to a registered social landlord e.g. East Midlands Housing Association
· Pay your rent to the Council
· Pay a rent that has been registered as a 'fair rent'
· Have a tenancy that began before 1989
· Live in a hostel, caravan, mobile home or houseboat
How are the LHA rates worked out?
Each Local Authority will be divided into areas called Broad Rental Market Areas, usually based on postcode. The Rent Service will set monthly LHA rates for different sized properties in each of these areas. The council and the Rent Service will publish these so that landlords and tenants can find out the amount of rent that the LHA will cover in any given circumstance. So if you are looking for accommodation, you will be able to see the LHA rate that will apply to you before deciding whether to rent a property.
The level of LHA will depend on only two things:
· The area you live in - this will establish the Broad Rental Market Area; and
· Who lives with you - this will determine the size of the property you are allowed and will be based on the number of bedrooms required.
The number of people who share the accommodation with you will be used to work out the number of bedrooms needed.
One bedroom will be allowed for:
· Every adult couple (married or unmarried)
· Every other adult aged 16 or over
· Any two children aged under 10
· Any two children of the same sex aged up to 15
· Any other child
For further information on the rents service click on the following link: The rent service Web Site
Tenants aged under 25 who live alone
If you are single and under 25 years of age, you will be entitled to a standard rate for a room in shared accommodation.
This rate will be based on properties where the tenant has a room of their own but shares all or some of the facilities (for example a living room, kitchen or bathroom). It is likely to be more generous than the current Single Room Rate allowed under Housing Benefit rules.
Tenants aged 25 years and over who live alone and couples with no dependant children.
If you are a single tenant aged 25 years and over, or a couple with no dependant children, you will be entitled to the rate for a one-bedroom property (for example a flat) provided that you actually rent a property of at least this size.
However, if you choose to live in a property where all or some of the facilities are shared (such as those described for single tenants under 25) you will only be entitled to the standard shared rate.
How much Local Housing Allowance could I get?
The LHA rate will be the "starting point" to work out your housing benefit.
Your claim will be based on the LHA rate applicable for the month in which your claim is made. This rate will not usually change for 12 months unless there is a change in the number of bedrooms required. The amount of benefit you get will depend on your income, savings and circumstances. There will be no change to the way benefit entitlement is calculated.
In some cases the LHA rate may be higher than the actual rent that you pay. So if your rent is below the LHA allowance and you are entitled to maximum Housing Benefit, you will be able to keep any difference, up to a maximum of £15.
For example, if you find a property for £75 per week and the LHA rate is £80, you will be able to keep the extra £5. This will not affect any other means-tested benefits that you receive.
If you decide to move into a property with a rent that exceeds the LHA, you will need to make up the difference yourself, as now.
How does the Local Housing Allowance affect landlords?
As well as the amount of housing benefit that can be paid, the main change for landlords is that LHA will usually be paid to the tenant. There are however safeguards in place so that a landlord may be paid directly in certain cases, as protection for vulnerable tenants.
More information
More information is available from the Dept for Work and Pensions and Direct.gov websites.
View/Download Documents
Local Housing Allowance Safeguards for Tenants and Landlords (117 KB)
