Local Housing Allowance for landlords
Local Housing Allowance (LHA) is for people on a low income who rent their property from a private landlord and is based on the number of rooms people are allowed - not how much the rent is. The amount of Housing Benefit they will get depends on where they live and who lives with them. See the Local Housing Allowance rates page for more information.
Local Housing Allowance rates are set for different types of accommodation in each area. The rates range from a single room in a shared house, up to properties with four bedrooms.
Exceptions to the Local Housing Allowance Scheme
If your tenant received Housing Benefit before 7 April 2008, the Local Housing Allowance will only apply to them if they change address or they have a break in their claim. The following types of tenancies are also exempt from the Local Housing allowance scheme:
- Housing Association tenancies.
- Some protected cases, such as supported housing provided by certain social landlords or charities.
- Caravans, houseboats and hostels.
- Tenancies where there is a substantial amount of board provided e.g. B&Bs.
If your tenancy falls into one of these categories your tenant's Housing Benefit will be calculated using different rules.
How is Local Housing Allowance paid?
In most cases Local Housing Allowance is paid directly into your tenant’s bank account and it will be their responsibility to pay you the rent.
It's important that your tenant has a bank account for their LHA to be paid into. This way they can set up a standing order to ensure you receive your rent regularly and on time. If your tenant cannot open a current account they may be able to open a basic bank account.
When can LHA be paid directly to landlords?
We can pay Local Housing Allowance directly to landlords in the following four circumstances:
If your tenant is vulnerable and/or unable to 'manage their affairs / finance'
A vulnerable person can be defined as someone who is unable to manage their own affairs. For example a tenant with learning difficulties may be classed as vulnerable. Other examples include medical conditions, illiteracy, drug/alcohol/gambling dependencies, leaving prison etc.
If you believe your tenant is vulnerable and would prefer for their Local Housing Allowance to be paid directly to yourself, you will need to fill in and return a LHA direct payments form. A decision is made on each case depending on its merits.
If your tenant is unlikely to pay their rent
Your tenant may have previously been in arrears, have a history of fraud, have severe debt problems/recent County Court Judgements etc. If this is the case you may be able to apply for Local Housing Allowance to be paid directly to yourself.
You can also apply for direct payments if your tenant is unable to open a bank account.
If you believe your tenant is ‘unlikely to pay their rent’ and would prefer for their Local Housing Allowance to be paid directly to yourself, you will need to fill in and return a LHA direct payments form . In all cases we will investigate and seek evidence why your tenant is unlikely to pay and make a decision on each case depending on the circumstances.
If your tenant is in arrears with their rent by 8 weeks or more
If your tenant is 8 weeks or more in arrears with their rent, you can apply for direct payments of LHA. Just fill in a direct payments (8 weeks in arrears) form and send it to us with proof that your tenant is behind with their rent. For example a copy of a rent book or account will do.
Even if your tenant is not 8 weeks or more in arrears with their rent, you should still let us know if they have missed a payment. We may be able to help. You can phone us on 0161 912 2220 or email email@example.com.
If we consider it would help the tenant secure or retain their tenancy
For example, if the rent you charge is higher than the Local Housing Allowance rate and you reduce this to an affordable level. To apply under this criteria please fill in a direct payments (affordable rent) form.
For more information about direct payments download a copy of our safeguarding policy.