On 7th April 2008 the Local Housing Allowance (LHA) was introduced into the UK to replace Housing Benefit (HB).

LHA is based on the area in which the tenant lives, the number of occupiers in the property and household size. Another interesting difference between LHA and HB, is that with the new scheme, if the determined LHA rate is higher than the rent agreed with the landlord / letting agency, then the tenant can keep any excess benefit up to a maximum of £15 / week.

Note that the LHA does not apply to existing tenants, only those moving into new rented accommodation.

Although the Local Housing Allowance applies throughout the UK an important difference exists within Northern Ireland. In England, Scotland and Wales, payment is normally made to the tenant either directly into a bank or building society account, or by cheque. If the tenant has fallen into arrears then the landlord can request that payment be made directly. In Northern Ireland the payment mechanism remains unchanged from that employed by the Housing Benefit scheme, i.e. the tenant can choose if they wish to receive the allowance or have it paid directly to the landlord.

This may all seem to be yet another headache for landlords and letting agents. Fortunately RentPro is on hand to help. It’s obvious that under the new scheme a greater potential exists for fluctuations in rent received directly from the tenant and rent received from a benefit agency. RentPro accommodates such changes ensuring that you’re always aware of shortfalls in rent and the source of the shortfall, i.e. tenant or benefit agency.

Further information is available from the Directgov website.