Information for private landlords

Why is Local Housing Allowance being introduced?

Local Housing Allowance gives tenants more choice in where they live and it's fairer too. This is because:

Tenants will be entitled to the same amount of benefit as people in the same circumstances as them.

• Tenants can find out how much benefit they can get before renting a property.
• Tenants can decide how much of benefit they want to spend on renting a property.
• It encourages tenants to take financial responsibility.
• Tenants will find out about their benefit entitlement more quickly than before.

How does Local Housing Allowance differ from Housing Benefit?

Local Housing Allowance differs from the current Housing Benefit in two ways. Firstly, benefit will not based on the rent charged. It will be based on:

• Who lives in the property
• Which area the property is in
• The tenants income
• The tenants savings.

In some cases the amount of benefit a tenant will be entitled to will be affected by other things. These can include:

• How much rent is charged
• Whether anyone living with the tenant is expected to contribute to the rent.

The second major change is that in the majority of cases benefit will be paid to the claimant who will then be responsible for paying the landlord.   The following are the exceptions to this rule:

• Local authority landlords who let to "council tenants".
• Tenancies with registered social landlords.
• Some supported housing.
• Tenancies which started before 15 January 1989.
• Tenancies in caravans, houseboats or hostels.
• Tenants who have difficulty in managing their finances.
• Tenancies where the Rent Officer has decided that a substantial part of the rent is for board and attendance.

Why are we stopping direct payment to landlords?

Tenants who get benefit calculated using Local Housing Allowance rates should be able to take greater responsibility for managing their financial affairs.  For this reason they should be able to pay their rent to their landlords the same way as other tenants do.

In the past tenants had the right to ask us to pay their benefit direct to their landlord.  It is this right that is changing.

Won't this discourage landlords from letting their properties to claimants?

We believe Local Housing Allowance has advantages for both landlords and tenants.

The reforms are intended to help landlords, as well as tenants, by creating a more transparent system that is simpler to understand and administer.  Overall, it will support and clarify the relationships between local authorities, tenants and landlords.

Landlords will still be able to ask local authorities to help with tenants who receive benefit who are getting into arrears.

Because payments are going direct to tenants, landlords are unlikely to be required to repay over paid benefit. 

We believe the safe guards that exist regarding direct payment to landlords strike the right balance in protecting the interests of tenants and landlords.

Can the tenant request their benefit to be paid to their landlord?

As part of the Housing Benefit reforms tenants will no longer be able to simply ask us to pay their benefit entitlement to their landlords.  But if a tenant feels they may have difficulty in managing their financial affairs and would like us to pay their landlord direct we will consider any request they make.  This can be made in writing or we can provide a request form.  Some reasons we would consider making payment to the landlord are:

• Tenant has a learning difficulty.
• Tenant has a medical condition that makes it difficult for them to manage their affairs.
• Tenant is illiterate.
• Tenant has difficulty in speaking English.
• Tenant is addicted to drugs, alcohol or gambling
• Tenant is fleeing domestic violence.
• Tenant is a young homeless person.
• Tenant has recently been released from prison.
• Tenant has severe debt problems or is an undischarged bankrupt.
• Tenant is unable to open a bank account.

Who decides if a tenant is likely to have difficulty in paying their rent?

The local authority will decide whether a tenant is likely to have difficulty in paying their rent.   Requests for direct payment to landlord can be made by the tenant or any other interested party.  Evidence will be required to support a request.

If direct payments are made to a landlord how long will this arrangement last?

Where a tenant is considered likely to have long term difficulty in paying their rent, payment to landlord can be on going.

In cases where a situation is likely to be temporary, or where rent arrears of more than eight weeks have been repaid the situation will be reviewed. If the tenant is in a better position, payments may change to being made to them. 

Can direct payments be made a condition of the tenancy?

A local authority is not party to the tenancy agreement between a landlord and a tenant and is not bound by the conditions of a tenancy agreement. The rules about when we can pay a landlord direct are outlined above. Making direct payment a condition of the tenancy will not change these rules.

Can I appeal against the payment decision?

The new scheme does not change the appeal rights. You can still appeal against a decision to not make direct payment to you.  

What protection exists for landlords?

There are a range of safeguards to protect the interests of landlords. Some of these already exist.  For example, a local authority must usually pay the landlord direct if the tenant is eight weeks or more in arrears with their rent.

Payment can be made to landlords if we decide the tenant is unlikely to pay their rent or if they have difficulty managing their financial affairs.

We recommend that landlords contact us as soon as possible if a tenant is starting to build up rent arrears. 

Will there be any changes in the way I'm paid for tenants for whom direct payments are already being made?

No. Any tenant who is getting Housing Benefit on 7 April 2008 will continue to be paid the old way. Any Housing Benefit payments that are paid direct to the landlord on behalf of tenants will continue to receive payment.  

The Local Housing Allowance rules will only apply to tenants who make a new claim, move house or have a break in their claim, on or after 7 April 2008.

Landlords who own or manage a number of properties, may find that they have tenants who claim Housing Benefit under two different schemes. This means it may be possible to receive direct payments for some tenants but not for others.  

How to find out what the Local Housing Allowance rates will be for your property?

We will publish the Local Housing Allowances rates each month. These will be displayed on the Allowance Rates page of our website, in our Customer Service Centres and in our office at St Aldates, opposite the Town Hall.

Page last reviewed 7 Apr 2011