Is Universal Credit forcing rent reductions on landlords?

LHA should only fully cover 30% of the rental properties in a BRMA. If your property is worth more than the cheapest 30% of properties then it’s reasonable that the rent is higher than the LHA.

Of course, data for LHA was gathered in September 2023 so it’s also reasonable for the rent to be higher than LHA for even fewer than 30% of the rental properties in the area.

The best thing to do is to ignore LHA and charge the reasonable rent for the property.

If housing benefits were covering full amount of rent before and now UC limiting amount it will pay, tenant should be eligible to claim a "discretionary housing benefit" from local council to make up some if not all, of the rent.
Tell them to apply.

There should be some options for additional financial support for the family with this - you will ideally need Citizens Advice, or Shelter to work with the tenant and family, otherwise you will just get a 'No' from The Council but there are several additional financial possibilities to explore.
Good luck with this.
Jonathan

Reply to the comment left by Jill Church at 21/10/2024 - 10:51
The application has been made and is working its way through the system. However the Tenant has been warned that it can only be applied for a limited period, a few months, not permanently.

As I'm the 'evil landlord', the council won't discuss the issues, until written authority is granted by the tenant, something else that is working its way through the system.

You need to decide whether you are running a business or a charity.
That is a decision only you can make.

If you are running a business, then you must ask for the market rent. It's up to the tenant to find the shortfall. Discretionary benefit is a one-off, so long term you can help the tenant find alternative support. For a severely disabled tenant, there are probably various pots available, perhaps a charity that specialises in helping people with his/her disability?

issue a section 21 asap -

I wonder what a car dealer would say, or any other retailer come to that, would say if I said I wanted something 30% cheaper just because I can't afford it? Yet by us Landlords saying no we are the bad guys. This war on Landlords is causing both Landlords and Tenants to lose.

Not knowing exactly what your tenants are claiming for, there should be no issue with them paying the shortfall.

Universal credit is just them lumping all the benefits into one payment instead of it being all piecemeal. It should be that if the housing benefit was covering the rent previously, it should now as well.

But in addition to that, as you say that they are severely disabled they should also be in receipt of the various disabled person benefits and carer benefits, all which will be added into the UC amount. Add on the basic supplement, a likely council tax reduction and they will likely have more than enough to cover the rent.

I can also see though why they would not increase the amount paid for the housing element. If they were to do this for people/tenants/landlords that simply asked, there is no reason why a landlord would not just increase the rent to whatever they wanted it to be, fully in the knowledge they could get it.

It's unfortunate, but understandable.

Is it supressing the potential amount of rent possible, probably yes in part. But the opposite could make things considerably worse.

Look up the local housing allowance for your tenants.

See what they are entitled to. Work out how much it is a month.

If both are disabled claiming it may be there are entitled to the two or three bed rate if someone has to stay over or they need to sleep in separate rooms.

It will surprise just how much money the tenants may be getting.

They can pay top up . You just have to be straight with them.

I have had this a few times.

The tenant should not be paying council tax if their income is low.
Something is not right here.