Local Housing Allowance for tenants
Local Housing Allowance (LHA) is a way of working out Housing Benefit for people on low incomes who rent from private landlords. LHA is based on the number of rooms people are allowed, not how much the rent is. The number of rooms allowed depends on who lives with you.
When was LHA introduced?
Local Housing Allowance was rolled out nationally on 7 April 2008. If you already claimed Housing benefit on this date you will continue to receive benefit under the existing rules unless you change address or have a break in your claim.
LHA will affect all new claims (made after 8 April 2008) for Housing Benefit unless your tenancy is exempt - see below.
Are some types of properties exempt?
Yes, LHA will not affect you if:
- Your tenancy started before 1989.
- You rent from a Housing Association.
- Your tenancy is protected. For example, you live in supported housing provided by certain social landlords or charities.
- You live in a Caravan, houseboat or a hostel.
- Your tenancy includes a substantial amount of board e.g. B&Bs.
If you fall into one of these categories your Housing Benefit will be worked out under the existing rules.
Why was LHA introduced?
The objectives of LHA are to promote:
- Fairness: LHA has been designed to pay the same amount to tenants with similar circumstances living in the same area. This differs from the current Housing benefit scheme, which ties the level of benefit to rent actually charged for a property.
- Choice: Tenants are able to take greater responsibility and choose how to spend their income in a similar way to tenants who are not in receipt of benefits. Tenants can choose whether to rent a larger property or spend less on rent and increase their income.
- Transparency: The current link between Housing Benefit and individual rents is complex and does not set out clearly what level of support is available for people on low incomes. With LHA tenants (and landlords) can find out in advance exactly how much benefit can be paid towards housing costs in different areas and for different size properties.
- Personal responsibility: Empowering people to budget for and to pay their rent themselves, rather than having it paid for them, helps develop the skills unemployed tenants will need as they move back into work.
- Financial inclusion: Ideally, we want people to have their housing payments paid into a bank account and to set up a standing order to pay the rent to their landlord. This has the advantage of being a safe and secure method of payment and provides certainty for landlords that rent will be paid.
- Reduced barriers to work: Greater certainty about what in-work benefit tenants could receive is expected to encourage customers to take the step from welfare into work.
- Improved administration: There will no longer be a need for the complex rent restrictions and individual referral of rents to rent officers that currently contribute to the delay in processing claims by private tenants. The LHA scheme is simpler for local authorities to operate and for tenants to understand.
What's different about local housing allowance?
Local Housing Allowance gives you more choice. You will be able to choose the quality and price of your accommodation and shop around with your LHA.
LHA is usually paid to you and not to your landlord. You are responsible for paying your rent to your landlord.
If you are looking for somewhere to rent you can choose to:
- Pay more than the LHA to rent a more expensive property.
- Rent a property where the rent is the same or lower than the LHA.
If you already renting and do not need or do not wish to move you will be in a better position to negotiate with your landlord on:
- Future rent increases.
- Any improvements to the property.
Local Housing Allowance is clearer
If you move within the same area you will usually get the same amount of LHA. By knowing how much LHA you are entitled to before you look for a new place to live, it is easier for you to decide what type of property you can afford. View our LHA rates for more information.
How is LHA paid?
LHA is usually paid directly to you. You are then responsible for paying the rent to your landlord. Only in exceptional circumstances can we pay LHA directly to your landlord.
You must agree with your landlord about how and when you will pay your rent. Being responsible for paying your rent to your landlord gives you greater opportunity to negotiate with your landlord about how much rent you pay.
We will pay your benefit straight into your bank account. If you do not have a bank account, then you will need to open one. As well as receiving your Housing Benefit faster and more securely, a bank account will give you a route to many other banking services. Even If you cannot open a current account, you may be able to open a basic bank account.
For more information about Basic Bank Accounts visit the Financial Services Authority website.
If you have a bank account there are a number of ways you can pay the rent to your landlord. These include:
- Set up a standing order or a direct debit. This is the easiest way to ensure your rent is paid on time.
- Pay by cheque if you have a chequebook.
- Pay your landlord with cash that you have withdrawn from the bank.
You should talk to your landlord about how he or she would prefer you to pay the rent.
You can get advice about opening and using a bank account from any bank or building society. We have a list of local banks and building societies in our area. You can telephone 0161 912 3302 for more information. You can also get advice from organisations such as Citizens Advice.
What happens if I don't pay my rent?
If you do not pay your rent, your landlord can ask the courts to evict you from your home.
Eviction means that:
- You will lose your home.
- You may to have difficulty finding new accommodation, as your landlord is unlikely to give you a reference.
- You will still have to pay the landlord the money you owe and possibly extra money to cover any court costs.
How are the LHA rates worked out?
The amount of LHA that you may receive depends on:
- Who lives with you.
- The area you live in.
- What money you have coming in.
- What savings you have.
How many rooms am I allowed?
LHA rates will be broken down into 'Room Rates' that will apply depending on the size of the householders occupying the property, including any non-dependants. To calculate the size criteria you need to count one bedroom for the following people:
- Every adult couple (married or unmarried).
- Any other adult aged 16 or over.
- Any two children under age 10.
- Any two children of the same sex aged up to 15.
- Any other child.
Single customers who live alone
Single customers aged under 35 years will be entitled to the standard rate for a room in shared accommodation. This 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). This is known as the shared Local Housing Allowance rate.