Changes to LHA postponed - Pre Budget Review

tbs624

The Govt announced in the PBR that the proposal to alter LHA so that Ts no longer could claim up to £15 over and above their actual rent will be postponed until 2011


The Govt will be" launching an immediate consultation on its approach to Housing Benefit reform and affordability."

The news was welcomed by Crisis who had launched their Poor choice: stop cuts to the poorest campaign to oppose the original proposal.

clutton_2

i have never ever understood why extra public funds should be given to tenants over and above the rent agreed.

Prior to LHA local rents were assessed by the local rent offices, and so landlords could not charge excessively and get paid higher than "market" rents - thus protecting the public purse in a way

with respect tbs - i have had 3 different emails from respected sources about the contents of the PBR and no one else has mentioned this ... are you sure ?

poppysarah

Stop cuts to the poorest? That'll be why they didn't increase NI then. Oh hang on they did.

tbs624

clutton wrote: »

i have never ever understood why extra public funds should be given to tenants over and above the rent agreed.

Prior to LHA local rents were assessed by the local rent offices, and so landlords could not charge excessively and get paid higher than "market" rents - thus protecting the public purse in a way

with respect tbs - i have had 3 different emails from respected sources about the contents of the PBR and no one else has mentioned this ... are you sure ?

With respect Clutton see page 5 here , under social housing here and the Crisis Press Release here

The idea was supposed to be to encourage those in receipt of LHA to take control of their own housing decisions, that it may even drive down rental prices within that sector of the market. If the Ts were able to retain some part of the money there was an incentive to "shop around" to get a lower rent.

TBH, those properties for which the rental costs are below LHA are going to be the grimmer properties, in the grimmest side of the town . Who would begrudge the T who, in an effort to eke out their budget,, took a decision to go for one of those to be able to add to their domestic budget with the excess..

I don't know what the answer is to this one because its clear that what has happened in some areas is that if LLs know that , say, £68 is the going LHA rate, then £68 is what they look to achieve so there are few opportunities for Ts to actually benefit..

clutton_2

thanks very much

""TBH, those properties for which the rental costs are below LHA are going to be the grimmer properties, in the grimmest side of the town""

this is such a broad generalisation that i do feel the need to challenge it...

The 2004 Act brought in LHA and also the merging of Rent Offices into much larger BRMB areas. As a result some LHA levels shot up, and some went down - it all depended on the "mix" of property stock and the types of smaller areas being merged....

If a cheaper area was merged with an expensive area, then LHA went up - which meant that tenants did very well - and of course the reverse was true.

Government never followed through their muddled thinking, and many politicians and councillors were simply horrified when they realised that once local rents were established (by the LHA level) as "market" rent by local councils - then that new rate became the local marekt rent and landlords were quite likely to put up their rents to that level.

The cost-savings of closing many Rent Offices, has probably been far out-weighed by the increase in the overall LHA bill.

A muddled and badly worded piece of legislation....

tbs624

clutton wrote: »

""TBH, those properties for which the rental costs are below LHA are going to be the grimmer properties, in the grimmest side of the town""

this is such a broad generalisation that i do feel the need to challenge it...

The 2004 Act brought in LHA and also the merging of Rent Offices into much larger BRMB areas. As a result some LHA levels shot up, and some went down - it all depended on the "mix" of property stock and the types of smaller areas being merged....

If a cheaper area was merged with an expensive area, then LHA went up - which meant that tenants did very well - and of course the reverse was true.

The BMRAs ( Broad Market Rental Areas) are too large (it's unfortunate that the Heffernan Court of Appeal HB case didn't change anything for the better).

However, it wasn't necessarily the Ts who did well - they may temporarily have done so if within their Fixed Term but as we have both acknowledged, many LLs felt justified in increasing their rents at the first available opportunity and you would have the ludicrous situation where a LL could "earn " more from letting to LHA claimants than s/he could from letting to those who were in full time work. Some of those who found that the LHA failed to meet their full rent would qualify for discretionary additional payments.

Clutton wrote:

... once local rents were established (by the LHA level) as "market" rent by local councils - then that new rate became the local marekt rent and landlords were quite likely to put up their rents to that level.

A point which I had already made and which undermines your comment above to a certain extent.

Clutton wrote:

A muddled and badly worded piece of legislation....

To which specific piece of legislation are you referring and do you mean the whole of it or just parts of it? Examples?

clutton_2

2004 Housing Act - 3xthe deposit part if this Act is Very vaguely worded - hence different judicial decisions as to whether tenants/ex-tenants should/shouldnot be awarded 3xtimes..... - another ambiguous section is the "tenant vulnerability" wording....

PasturesNew

tbs624 wrote: »

TBH, those properties for which the rental costs are below LHA are going to be the grimmer properties, in the grimmest side of the town . Who would begrudge the T who, in an effort to eke out their budget,, took a decision to go for one of those to be able to add to their domestic budget with the excess..

My rent is £25/week under what my LHA would be.

If I were on LHA I'd stay here just to pocket the £15 difference, it'd be a 25% income increase over the single person's JSA.

If the £15 were removed, I'd be looking to spend the full LHA and get the best property I could for that money.