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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 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 1 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 • • • • 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?