0:02 AM, 11th April 2024, About 8 months ago 53
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Landlords renting to Universal Credit tenants are being warned of potential payment inconsistencies in light of recent changes by the government.
The Chancellor Jeremy Hunt unveiled plans to unfreeze Local Housing Allowance (LHA) which will increase to the ‘30th percentile of local market rents’.
Despite promises of increased housing support for low-income renters starting from April 1st, 2024, many landlords are still receiving payments based on the old rates, despite the government’s pledge.
Mick Roberts, one of Nottingham’s largest landlords to house benefits tenants, says his tenants are still being paid on the old rate.
He told Property118: “I’ve been undercharging my benefit tenants for years and trying to look after them with cheap rents.
“There was a sigh of relief when the new LHA rates were introduced and promised on the 1st of April 2024.”
He added: “However, some landlords including myself are now being paid and thinking why am I still being paid the old rate?
“My tenants are ringing me who get paid on the 13th of April and who have their award notification from UC to say they are still being paid the old rate.”
Bill Irvine, a universal credit expert, says payments based on the new rates won’t kick in until after the tenant’s first Benefit Assessment Period (BAP).
In a blog post, Mr Irvine explains while the government announced the increase effective on April 1st, the actual payment adjustment follows a different timeline.
He says it’s not straightforward, especially for UC claimants, and has created a helpful timeline to demonstrate:
Mr Irvine explains many universal credit tenants will receive a delay in payments.
He told us: “Most private landlords were delighted when the Chancellor confirmed the unfreezing of the LHA rates from April after a four-year wait.
“Because the LHA changes are subject to the Rent Officer’s order, the example relating to Tenant A above, applies to both his personal and “housing costs element.
“So, where private tenants have a BAP starting, between the 1st to 7th, they will have to wait until 7th-14th June before they receive their first payment at the higher rates.”
Mr Roberts says the confusion will cause many landlords to simply not rent out to benefit tenants.
He said: “This will be another reason some landlords will refuse to take UC tenants.
“It’s just one more factor that adds to our concerns and may ultimately lead us to reconsider our tenant selection process, perhaps opting for higher-earning non-benefit tenants in the future.”
When approached by Property118 for comment a spokesperson from the Department of Work and Pensions said: “Our increase to the Local Housing Allowance rate means that 1.6 million private renters on the lowest incomes will be around £800 a year better off.
“This is on top of the over £30 billion we are investing in housing support this year, while our Discretionary Housing Payments provide a safety net for anyone struggling to meet their rent or housing costs.”
“The increase to the Local Housing Allowance rates from April 2024 applies to the ‘relevant Monday’ in a new Assessment Period for UC claimants following the start of the new tax year.
“This aligns to Universal Credit (UC) benefits uprating which also comes into force from the start of the first Assessment Period beginning on or after the first Monday of the tax year.
“As UC is a monthly assessed benefit that is paid in arrears, a claimant will receive their newly uprated benefit award and their increase to LHA at their first full Assessment Period that follows the change.”
Bill irvine
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Sign Up22:12 PM, 11th April 2024, About 8 months ago
Reply to the comment left by Reluctant Landlord at 11/04/2024 - 16:51
Reluctant landlord
For the purpose of the uprating order a tenant with BAP 9th March to 8th April will receive the “old rate” of LHA on 15th April and new rate 15th May. The general “whole mont rule” does not apply on this occasion, hence the reason for the article.
Reluctant Landlord
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Sign Up8:50 AM, 12th April 2024, About 8 months ago
apologies all - I mis understood it too. AUGH!
Slooky
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Sign Up10:00 AM, 12th April 2024, About 8 months ago
Reply to the comment left by Reluctant Landlord at 12/04/2024 - 08:50
Easy to misunderstand because it's difficult to believe that they can legitimately rob people. Whether you get the uplift or not in April is down to chance.
TheMaluka
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Sign Up11:12 AM, 12th April 2024, About 8 months ago
Reply to the comment left by Slooky at 12/04/2024 - 10:00
Chance or design? I wonder if a similar rule would apply to paying tax?
Mick Roberts
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Sign Up11:50 AM, 12th April 2024, About 8 months ago
Reply to the comment left by Reluctant Landlord at 12/04/2024 - 08:50
Yes me too, it's that bonkers, I thought Bill had got it wrong when he told me. It is laughingly unbelievable that they can bring a rent increase in from 1 April yet say You not getting it till 14th May. Although counteracting that, UC could say we are paying that 14th May for the period 8th April-7 May.
Mick Roberts
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Sign Up11:50 AM, 12th April 2024, About 8 months ago
Reply to the comment left by TheMaluka at 12/04/2024 - 11:12
Design. Saved em £ billions.
Reluctant Landlord
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Sign Up13:21 PM, 12th April 2024, About 8 months ago
Reply to the comment left by Mick Roberts at 12/04/2024 - 11:50
all that will now happen is that my tenants will be filling in DHP's to get help from the council with the top ups.
my rent increases were timed for 1st April to take account of the LHA increase so that the LHA increase paid the increased rent AND left the tenants with less top up to pay.
eg current rent 575 current LHA 525 - tenant top ups 50
New rent 700, new LHA 725 - top ups 25.
GlanACC
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Sign Up7:31 AM, 13th April 2024, About 8 months ago
If you issue an S8 because of rent arrears and the tenant is on UC which may have been delayed then your S8 will fail as the judge has to take into account delays in finalising a UC claim - and I have known them (by personal experience) to take 3 months to sort out
Ray Guselli
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Sign Up12:01 PM, 16th April 2024, About 8 months ago
The increase in LHA Housing Benefit (Housing Element for Universal Credit claimants) is a welcome gesture and goes some way to reflecting the additional costs and charges landlords have incurred in the provision of accommodation over recent years.
It enables landlords to increase rents to a more realistic level (although in many cases, still below the market rate) and to do so, without extra cost to the claimant, as the increase is covered by the increase in the Housing Benefit/Housing Allowance.
I am delighted to say that our local council, Westmorland and Furness, has immediately implemented the changes without problem, upon notice by us of the rent changes: excellent service.
The same document was sent by tenants to Universal Credit which has become an unmitigated disaster.
In an attempt to help the situation and to accomplish a smooth and orderly change to the rent/LHA, we provided tenants with the letter/message below in February, which they sent via their journals to Universal Credit.
Unfortunately, because the change had not yet occurred some were told to resubmit the message on 5th April, the date the rent would increase.
However, some were told they needed to provide a new tenancy:
that is wrong as this simple change of circumstances does not require a change to an existing tenancy. This is by mutual agreement, the tenant agrees and has confirmed the position in their journal and the original start date of the tenancy remains.
The term of the tenancy is also unaffected and in any case, many move automatically from an assured shorthold to a periodic tenancy, which runs month to month.
Some were told to provide evidence of the change or their housing documentation:
that was provided within the document which they had submitted to Universal Credit via their journal; our letter etc.
Other were asked to provide utility bills:
this too is unnecessary as their status has already been verified through the original claim and the fact that they are already being paid Universal Credit at their current address and for the same landlord indicates the validity of their claims.
However, on 5th April, tenants were issued with the same letter again and which they submitted via their journals to Universal Credit.
Again, tenants were asked to provide further details and information: the very particulars already provided in the letter they had again sent to Universal Credit.
I therefore assumed I was misunderstanding the position and took advice from a specialist advice agency which confirmed our approach had been both helpful and correct and that there was no need for further information or delays.
Following their advice, I messaged DWP North Central Group on 6th April 2024.
I subsequently received a couple of calls and messages from a DWP Partnership Manager who was excellent and seemed to understand the problem and was sympathetic to the situation but did suggest that as these rent increases were something new, they were still looking at the processes.
However she subsequently received further advice and passed to me, that notification of a rent increase to Universal Credit had to include the following: -
1 tenant’s and landlord’s name, address and contact details
– Already provided in our letter
2 address of the property
– Already provided in our letter
3 date the tenancy began and how long the term is for
Provided previously to instigate the universal credit housing element payment and should not be required again as unaffected
4 amount of rent and how often it is paid
– Already provided in our letter
5 deposit amounts payable.
We do not take deposits and this in any case is irrelevant as not a change of circumstances for rent
In the case of a traditional paper tenancy agreement, signatures of both the tenant and landlord or letting agent are required
The tenant is notifying a change which they agree to via their journal. My signature is on the letter and their submission via the journal proves mutual consent.
A tenant can notify Universal Credit if the rent is reduced and does not need the landlord’s signature to advise Universal Credit.
A tenant can notify Universal Credit that they have vacated a property: they do not need the landlord’s signature etc.
This is not in any case, a traditional paper tenancy agreement, but fulfilment by both parties to a government directive which, with respect Universal Credit, should be fully prepared to deal with.
Here is our message to tenants which they have sent via their journals to Universal Credit.
Hi, Tenant name in full
ACTION REQUIRED ON FRIDAY 5TH APRIL 2024
As you will recall, I messaged you recently asking you to send the message below to Universal Credit through your journal, following a change to the rent levels after a review by the Government and Local Authorities, of Local Housing Allowance Rates.
I understand that some people have been asked by Universal Credit to resubmit the message to them on 5th April, that being the date the change occurs.
Please can I therefore ask that you send this message again, by your journal, to Universal Credit on FRIDAY 5TH APRIL 2024.
Please confirm that you have done this on 5th April please as it is very important and failure to do so may result in rent arrears unnecessarily occurring.
If you do not know how to do this please let me know and I will help, but it is usually just copy and paste (everything).
Many thanks
Ray
Dear TENANT NAME,
PROPERTY DETAILS
FULL ADDRESS
ALL DETAILS PROVIDED
I write to advise you that, in accordance with increases made by the Government, to Local Housing Allowances which take effect from 5th April 2024, your rent will increase on that day.
However, where you are in receipt of housing benefit or Universal Credit, this increase is covered by the new Housing Benefit/Universal Credit rates.
For many of our residents, our rental charges have been less than many in the private sector.
Whilst mortgage interest rates, property insurances, material costs, tradesmen charges, wages and all other costs associated with the provision of accommodation have substantially increased, landlords have for some years absorbed these costs. The Government has recognised this and therefore provided these increased housing benefit rates to assist with the cost of rental for all tenants and landlords.
I therefore write to advise you that with effect from 5th April 2024, your rent will be £XXX per calendar month and all payments made should reflect this please.
If you are in receipt of Universal Credit, you need to immediately copy and send this message on your journal to Universal Credit so that they can make the necessary adjustment from 5th April 2024.
Please will you let me know when you have done that.
Where Housing Benefit is paid by Westmorland and Furness Council (previously Barrow Borough Council) direct to us you need do nothing unless asked by the council, as we will deal with this on your behalf.
Where you receive Housing Benefit direct and use that towards or to pay your rent, you will need to advise the council direct of the change so as to avoid losing the revised benefit entitlement.
You do not need a new tenancy for this increase to take effect.
If you are currently making a top up to your housing benefit, that should remain in place and not change.
If you are not already claiming benefit to assist with rental payments, it may be that you are entitled to. We are always happy to work with you to see what might be available, based on your circumstances.
Our rent levels still remain below many other providers and if there is anything you do not understand please let me know and I will try to help.
Best wishes as always
Ray
Cumbria Business Group Ltd
4 West Avenue
Barrow in Furness
Cumbria LA13 9AX
E mail rayguselli@outlook.com
Tel 01229 830739
mobile 07541062625
At the moment despite, the above notification sent to Universal Credit via tenants’ journals we still do not know if the rent increases/changes to LHA will be implemented or whether even more information is required.
Looking at the notification process for a change of circumstances for Universal Credit it would appear all has been complied with but we still have no clarification as to if the revised rents, in accordance with LHA changes, will be paid, causing tenants to go unnecessarily into arrears.
I am waiting for the lady at Universal Credit to come back to me, hopefully with a positive update.
I wonder if this is a national problem or limited to certain localities?
Would be interested to hear the approach of others...
Ray
Reluctant Landlord
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Sign Up13:31 PM, 20th April 2024, About 8 months ago
I have one flat (old boy, lovely) where the new LHA rate is going up to £700 pcm but at the mo, the rent is set at the old LHA rate 575.00
Will the new LHA rate be automatically paid (no circumstance change), or do I need to actually increase the rent first and the then has to declare this as a change of circumstance so the new rate is applied?
Surely the LHA is automatically applied as its on the rate according to the property (one bed exclusive facilities) and not according to what rent is actually being charged?