Forms and procedures for LHA Landlords

With all the hassle involved as you have detailed abov is it any wonder why more and more LL are withdrawing from this market.
There are sufficient private tenants out there that pay more than LHA, which will be reduced when UC comes in.
I say good luck to any LL that wishes to get involved in the LHA/UC market.
You won't be facing ant competition from me!!?

Paul, some would consider getting up every morning to go to work to be hassle Paul, but they do it to have more money. Investing into property for letting to LHA tenants is no different. JP does well out of it, so does Jonathan Clarke who regularly comments here and also Robin Pilley who we featured a while ago. Many investors choose the LHA market because they get better returns. It's not what I've done but sometimes I do question whether I made all the right choices when I decided to avoid that market. The more I read the more I learn that I could get far higher returns and even if I chose to employ one of those guys to manage all the hassle for me, my returns would still be higher than I get in the upper end of the market. The only difference would be that it perhaps not as vogue to have LHA tenants? 

John Paul is based up North so if I lived up there, he's who I would be doing business with. LHA isn't confined to the North though, Robin is in Haverhill near to Cambridge and Jonathan is in Milton Keynes. 

There will be lots of people who read your posts and wonder why YOU do what YOU do based on the hassle YOU deal with too. 

Why be so no negative towards JP's posts just because he shares a different business model to you? Surely the guy needs to be congratulated for sharing his top tips, just as you congratulate Mary Latham for the doing the very same thing?

Hi Paul
It's only a hassle if you don't know what your doing or not aware of the regs.
In my area private rents are not higher than LHA, simple fact so your comment is wrong. Some areas private rents are higher, some they are not, I'm in an area where private rents are lower than LHA
Do you know something about UC that we don't know, do you know how much lower it is or how much hassle it will be. I read everything their is about LHA and everything there is out there and how it will effect me and my landlords and I don't know the answer, so can you please point me to the article you have read that states this, as you seem to know based on your comments the future of UC/LHA
Maybe the fact you know very little of LHA clouds your judgement, your more than welcome to pop in to our offices if your ever passing and i can show you what a successful, profitable and yet rewarding business housing LHA tenants can be.

Sorry if I came across as negative about LHA.
At the end of the day any proposition has to be based on risk/reward.
Clearly in some parts of the country LHA may be a better proposition than PRS.
I think it is very much a question of assessing the local  market you are in and determining which section you prefer.
In my area the PRS pays more than LHA.
Obviously in other areas LHA bizarrely pays more than the PRS.
Consequently if I was in those areas I would probably rent to LHA.
I think therefore it is down to individual choice.
So all power to those that want to take LHA claimants on.
I would add though that I have had enough experience of LHA claimants to endeavour to avoid them at all costs.
I take as I find.
If that has clouded my view then so be it.
That means there is more opportunity for other LL who wish to take my  LHA market share!!?

My area is the same, good employment. Norwich is the financial services capital of East Anglia so plenty of white colar workers and we are also coastal so plenty of retirees too.

I beleive there are opportunities in LHA markets and for anybody with a decent lump to considering property it investment thee LHA market should not be ruled out. That's why I am so happy to run this piece. It's not what I do but I am learning from it and so are thousands of others.

Thanks JP - All good stuff as usual.  Paul B makes sweeping statements about a business model he clearly does not understand. He also makes inaccurate assumptions about UC which he presents as facts. This is misleading to 118 readers as the government themselves have yet to decide on the final structure of UC so Joe public is still in the dark. Paul B  simply does not know.
.I advise budding investors on LHA. . Some get it straight away, some get it after you`ve spent some time explaining the set up and overcoming their  perhaps natural apprehension. Some like Paul B just seem to have an inbuilt aversion to it and it will never be the model for them. .If they get LHA I`m happy for them and send them away with a smile on their face but if they don`t I`m still happy as its less competition for me! I fully accept also that some get it but chose for a variety of perfectly valid reasons not to use it as their model. Thats fine we are all different.  . I`m fortunate to live in an area ( Milton Keynes) where the LHA rates (providing you buy in the right area)  surpass the private rents in the same area by maybe say 100 pcm.  So 20 houses would mean an extra 24K per year in your pocket. If you thought LHA was too much hassle you could pay an agent like JP in your area that 24K to manage it expertly for you so your time is all freed up.  OR if where you live the figures are not weighted so much in LHA favour then you could  simply invest in  an area like where JP operates and get his agency to manage them for you in effect for free as well. So you win either way with LHA.   I self manage my own in MK  by choice and also manage some for investors who benefit from in effect free management from me because of that income differential.     

Well said Jonathan 🙂

No I do not make sweeping statements about UC; essentially my comments are so much conjecture based on what other parties have indicated.
I know so little about UC that I intend to avoid anyone who may have to be on it.
I will wait to see how LL who have to deal with these claimants manage the circumstances before I would countenance taking on a UC claimant.
I am afraid I more than understand the LHA business model.
In the areas I have properties the PRS pays more.
That is a matter of FACT.
If LHA paid more I would take on LHA claimants.
There is no complex business model needed.
It is a quite simple, you rent to people who will pay the most for your property type in it's location.
I deliberately purchased to rent to professionals and purchased what I considered the appropriate property type for that tenant type.
The PRS pay me more so I only rent to them.
Not hard to work out is it!?
No understanding needed.
Clearly LHA claimants are more viable tenants for other LL who have invested in LHA type property.
If you can convince me that I don't understand my business model of , PRS rent £1000 for my flat compared to £875.00 LHA for a domestic circumstance of a 3 bed property then I don't understand!!!? Or £673 for 2 bed domestic circumstance.
Why would I rent to a LHA claimant when I can achieve £1000pcm?
Again, I do not have an inbuilt aversion to LHA investment
However my dealings with LHA claimants have been such that I would not with to touch them with a bargepole.
I do not decry any LL that chooses to go down this investment route.
Indeed I commend them they are a lot braver than me!
I am also happy that I do not target the LHA market as indeed it leaves more opportunity for those such as Johnathan to take advantage of, more power to him I say.
You will only receive encouragement from me and definitely not competition!!
I agree that if you have an investment market for rentals where LHA pays more than the PRS you would be mad to rent to the PRS.
Indeed if I was in the MK area or chose to invest there then the LHA route does sound more attractive.
However I choose not to use LA, I like my investment properties being no more than 45 mins drive away, and I choose not to take on LHA claimants who I have to say I would not be a Good Samaritan to at any time.
Indeed the Jeremy Clarkson solution to deviants is something I would cheerfully have carried out, and I would have pulled the trigger.
I can assure you I wouldn't ever have suffered PTSD if such a fanciful solution ever occurred!?
I think Johnathan does talk from the persective of being a large LL.
For most LL who are of the small variety the PRD is a more viable solution for them.
Fortunately one of the s------s is now dead, thank god, the big C got the b---h.
The big boys like Johnathan are better suited to this investment market than the very small LL.
I take no issue with what JP does for his investment strategy.
It just isn't for me at the moment.

I dont want to become embroiled in landlord wars here haha

In my area, south east London, LHA on JPs model wouldnt work, simply because the PRS rents are so much higher.

Nice points JP, dead relevant and spot on, particularly on the subject of tenant awareness. So many LHA tenants I talk to regularly arent au fait with any of it. They will often take on propertuies they cant afford and once they have signed the necessary HB forms they seem to think their responsibility and involvement stops there - presuming that anything that happens from there on in is down to 'The cahncil'.

Mary Latham writes a lot about education of landlords and tenants being an essential component in improving and professionalising the PRS. I agree with her 100%.

A savvy landlord  signing up an LHA tenant should  make sure that they understand what they are getting into and how the HB system works. Housing officers, who are effectively the landlords working for council and housing association properties, have to do a 1 hour sign up interview when they hand the keys over, walking the tenant through the Ts & Cs of the tenancy agreement and explaining how to report repairs and the rights and obligations of both sides. I think this is something that could benefit landlrods and tenants in the PRS too.

This is a good series and JP is correct in urging the nurturing of relationships with people in the council dpeartments. My guess would be a mixed response though. I work in a council and am more than happy to help in anyway I can but even when I ring some of my colleagues it isnt always a case of 'all hands to the pump'.

Morning Ben,

I agree that a check in usually takes at least an hour, typically 90 minutes for us as a result of doing everything you've said plus the inventory and other paperwork to stay compliant.

I picked up on a very interesting statement from Nick Parkin on Property Tribes a week or so back. Apparently, LHA rates in Pimlico London are around £700 higher than private rent. £2,200 LHA rate compared to £1,500 for private tenants.