Transcript Slide 1

Local Housing Allowance –
the future
Richard Burrows
Lettings Research Manager
Rent Officer Functions
VOA Rent Officer Functions
• We were formerly the Rent Service but were absorbed
into the Valuation Office in April 2009.
• Rent Officers still register rents under the 1977 Rent Act
• Rent Officers still make determinations on pre-April 2008
Housing Benefit claims – every 52 weeks. This scheme
carries on until a break in claim or change address.
Rent Officers in Lettings Research Teams
• Production of Local Housing Allowance (LHA)
rates each month for over 150 Broad Rental
Market Areas (BRMAs)
• From the collection of agreed lettings on
houses and flats.
• Involving ongoing dialogue with Private rented
Sector (PRS)
Our Challenge
• Collection of data which is provided on a voluntary basis
by letting agents & landlords
• Ensuring that our data reflects rental levels in the market
• Maintaining a comprehensive range of lettings
information ensuring the best available overview of the
PRS
• Information is held securely and confidentially
• We publish some of the information on our website
The Local Housing Allowance- a recap
• Personal entitlement based on household size
• Claimant can choose smaller or larger
accommodation according to price and ability to
pay
• Until the end of March 2011, the LHA is based
on the middle of the range for a certain property
size. This means that half of the rental properties
of that size in the area will be affordable within
the LHA amount that tenants receive.
Local Housing Allowance
• LHA rates are published on the LHA-direct
website so that people know the rates before
signing a tenancy
• LHA rates are also published by each local
authority
• The rates are determined from 12 months of
data using an automatic process
• It is a 12 month rolling database to which we add
more data every month as older data falls off.
lha-direct.voa.gov.uk
• LHA Direct website
• Search by postcode for LHA rates since
April 2008
• BRMA Maps and associated review
documentation
• List of Rents used for every LHA showing
number of items and low / high rents
lha-direct.voa.gov.uk
lha-direct.voa.gov.uk
Changes to the LHA - caps
• From April 2011 a cap will be introduced for
each property size set at:
• £250pw for a 1 bedroom allowance
• £290pw for a 2 bedroom allowance
• £340pw for a 3 bedroom allowance
• £400pw for a 4 bedroom or larger
• The max £15pw excess that tenants renting
below the LHA can retain will also cease.
Changes to the LHA - 30th%
• From April 2011 a new limit will be introduced up to the
30th percentile for new claims.
• For ongoing LHA claims made before 1 April 2011,
where there is no change of circumstances, these will
continue to get Housing Benefit based on the current
rate of LHA received immediately before 1 April 2011.
• Safeguards - DHP & discretionary Direct Payments will
help LAs manage existing and new claims
• Existing claims : transactional arrangements – remain
on current rate of LHA for up to 9mths after the HB is reassessed, after 1 April 2011. So the 30th percentile will
start to apply for existing claims for most tenants from
January 2012 onwards.
Direct Payments
• New safeguard provision: discretion to pay HB direct to
landlord if it will assist in securing or retaining a tenancy
• Intended to help negotiate lower rents, new rents
normally at LHA rate
• Not a reversal to direct payments to landlords
• Must be satisfied – genuine reduction in the rent
• Anecdotal evidence – some landlords charge higher
rents to mitigate the risk of arrears
Changes to Local Housing Allowance
• The current median rent is the figure halfway up
the distribution of the List of Rents in the BRMA
i.e. 50%.
item 9 of 17 =£195.00
List of Rents
£250.00
£200.00
£150.00
£100.00
£50.00
£0.00
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Changes to Local Housing Allowance
• The 30 percentile identifies the rent or figure 30 percent up
from the lowest figure in the List of Rents. Item 5 of 17 =
£185.00.
• Effectively 30 percent of the rents are available to a claimant
and will also apply from April 2011 for new claims
List of Rents
£250.00
£200.00
£150.00
£100.00
£50.00
£0.00
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Changes to the LHA – comparison
Medway BRMA
BRMA
Household Category
March 2011 LHA
Medians
April 2011
30th percentile
Room (Shared facilities) £62.50 per week
£62.50 per week
1 Bed
£114.23
(£495pcm)
£103.85
(£450pcm)
2 Bed
£137.31
(£595pcm)
£126.92
(£550pcm)
3 Bed
£155.77
(£675pcm)
£144.23
(£625pcm)
4 Bed
£226.73 (£982.50pcm)
£190.38
(£825pcm)
Note - All 30th percentile figures are indicative only, and not actual statements of fact
Median LHA vs 30th percentile
Examples of Distribution Curve
500
Birmingham 2 Bedroom
450
400
Large sample and
stable
£ per week
350
300
250
200
150
100
50
0
1
213 425 637 849 1061 1273 1485 1697 1909 2121 2333 2545 2757 2969 3181 3393 3605 3817
90
St Helens 1 Room
80
70
Small sample and
unstable
£ per week
60
50
40
30
20
10
0
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4
7
10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76
Further Reforms
LHA rates
• Shared rooms (LHA Cat A), which applies to most single
people under 25, will be extended to people aged under
35 from January 2012.
• From 2013/14 the LHA rates will be baselined and
uprated on the basis of the Consumer Price Index (CPI).
• The link between market rents and LHA may be removed
but we are continuing to ensure we have the most
representative data.
The LHA and you - how can you help?
• LHA levels are determined by the actual rental levels in
each BRMA – in other words, the ‘market.’ We can not
use advertised rents.
• Landlords are a good source of lettings data & we send
out Mail shots to landlords such as HMO landlords
• The more lettings data we gather, the more robust and
reflective the LHA figures are.
• We need to represent the whole PRS, so we need to
include rooms, student lets, joint tenancies, flats over
commercial etc
Lettings Information Request
www.voa.gov.uk/lettingsresearch/
Contact Details
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Please send detail of your lettings via
Our website: www.voa.gov.uk/lettingsresearch
Or e-mail us: [email protected]
Or fax the lettings form
• Any questions?