Forms and procedures for LHA Landlords

Morning Mark,
No I cant believe that. Pimlico is a well moneyed up area and there is an LHA cap of £400. There are transitional provisions that allow people a little rollover time that may account for it at the moment but this is fast running out.
 
I would imagine that a rent of £1,500 in Pimlico would get you very little. A shed perhaps 🙂
 
Nick? Whaddya think?

Ben, I have emailed Nick Parkin inviting him to comment.

I've also found his original comment on Property tribes and the gap on the figures is even bigger than I recollected. The link is - http://propertytribes.ning.com/forum/topics/increase-your-rent-2-days-left-to-make-a-difference?commentId=2886658%3AComment%3A415453

Quote from Nick Parkin on Property Tribes forum - "No joke - LHA on a 2 Bedroom Flat in Pimlico is £2150, I've got several rented out between £1300 & £1500 pcm & a 3 bed rented out at £1100 pcm.
There are loads of Council Flats bought under Right to Buy & then rented out under LHA - the owners retire to Norfolk or Sussex on the proceeds, I'm surprised you don't know some. Until the Govt changed the AST rule most of these tenancies were common law because they exceeded the £25K AST limit (changed Oct 2010), so no hassle with deposit schemes & eviction problems either.
The history of LHA is fascinating, the Government thought they could shaft the PRS by offering tenants £5 to negotiate their rents down, and ended up being shafted themselves."

Further quotes from subsequent posts, same thread ......

Mark Alexander said: "I'm not familar with any of this, please share more details. What was the £5 bribe all about and how did it backfire?"

Nick Parkin responded "Plan A (1990s) Tenant Rents House. LA pays Rent to LL. Everyone happy.
Plan B (Government gets greedy) LA pays rent to tenant. Tenant negotiates a lower rent with LL, and gets to keep £5 of the reduced rent. In theory the Government saves money from the lower rent the tenant negotiates.
Plan C (What happened in practice) Tenant receives rent. Unilaterally negotiates 100% rent discount by not paying rent over to LL. LL increases rents to cover bad debts. LHA rates go through roof."

I just went on the VOA website where you can find the latest LHA rates based on a postcode. Pimlico is SW1W and I added 8PB as a typical street address and found the LHA rates for March 2012

 Shared Accommodation Rate:
£123.50 per weekOne Bedroom Rate:£250.00 per weekTwo Bedrooms Rate:£290.00 per weekThree Bedrooms Rate:£340.00 per weekFour Bedrooms Rate:£400.00 per week
I'm not aware of the £5 bribe being part of either the reason for LHA cuts or how it worked in practice. Tenants were previously allowed to keep any difference between the true rent and the LHA rate and then it was capped to only £15 above the true rent

Thanks for the clarification Ben. It would appear that Mr P was either ill informed or that his comments were just BS then?

Or the situation was a while back before the LHA caps kicked in. There are, as I said thetransitional provisions, that pay more for about 9 months after the cap came in, depending on the anniversary date that the tenant moved in on  but I think all of those run out by September time, so every tenant will be under the cap by then

Paul you said in relation to UC  .....
``There will be no ring-fencing of housing benefit.``That`s a fairly sweeping statement in my book. Where did your evidence come from for that  please. I thought it had yet to be decided
Ah but then you said .....
``I know so little about UC that I intend to avoid anyone who may have to be on it.`` 
I get confused with what you know and what you dont know.
.
You also said .....
``I do not have an inbuilt aversion to LHA investmentHowever my dealings with LHA claimants have been such that I would not with to touch them with a bargepole.`` 
Maybe a slight contradiction there perhaps! 

To be fair to Paul all the indications are that there will be no ring fencing of anything generally since the UC is designed to "empower" people to manage their own finances with less.  We expect that there will be certain vulnerable groups who may be given more "support" and this might include some ring fencing but overall the UC will be a single purse including all benefits but capped at a max amount, which will be less than they are getting at the moment

I am working on the basis that it will be the norm for those on benefits to be paid one amount and this is why Credit Union accounts will help landlords by setting up automatic payments of rent that will be taken from the UC when it hits their account.  My guess is that the utility companies will also insist on this which will help landlords to be seen as another service that must be paid for.

You are right Jonathan it is very much still in the melting pot but we need to be realistic the Government have an aim and while minor details may vary the overall aim will remain the same - one purse of money capped paid to the claimant

Well said Mary. we are a long way from a clear understanding of how UC will work in practice, other than we know social landlords are going to be subjected to payments direct to tenants and whereas PRS landlords can opt to not rent to benefit claimants, social landlrods have no such flexibility and this has the potential to be a complete disaster.

Also I read today that Westminster council are opting to raise council rents for tenants earning slightly over £60,000, to 40% of their income, so what? £2,000 a month (Help me out here guys, I have number blindness) Not a bad wage I hear you say, but this is total household income. So a married working couple on an aerage wage with a working 18 year old child may well tip them over the limit, meaning they lose the family home.

Big changes afoot and they aint over yet.

And what is with you guys on this thread? Handbags at dawn? haha I am the enemy to most but I post here because you guys always help each other out. Draw your claws in people

Oh I love it when you are masterful Ben hahahahaha

I am going to post a new thread Ben so that you and I can have a discussion about Universal Credit without pinching JP's great thread that I know will help many landlords who deal with LHA tenants.  Many landlords are concerned about how UC will impact on their business.

UC? Jeez, this is an open book if ever I saw one.

It aint finalised enough to really allow us to grasp what it means yet. Government talk of their aversion to social engineering, using a top down socilaist model to define what it is, but the top down down, market forces approach, is exactly the same thing, it just has less predictable qualities.

I'm an old socialist hand, member of Militant in the late 80s early 90s who doesnt believe in that as a solution anymore, although I do have a bee in my bonnet about social injustice, I think, in housing terms that any solution that doesnt include the interests of landlords too will always just be so much pointless placard waving.

Yeah. UC is the next thing that landlords, tenants, social lanldords, enforcement officers like me, need to really get to grips with. The landscape is being totally re-written. Shouting slogans from behind barricades will not help