Before I answer this question I think it’s key that I clear up one great myth I hear about Local Housing Allowance (LHA) tenants – will LHA tenants destroy my property?
There are good people who are workers and there are good people on LHA. There are bad people who are workers and there are bad people on LHA. The difference between you getting a good or bad tenant is not if they are working or not but making sure you have the right vetting criteria.
How does LHA work?
LHA is paid based upon the entitlement of your tenant. If your tenant has a family of three they will be entitled to more LHA than a single person. LHA however is not just accepting the fact that if your tenant has 2 children they will be entitled to a 3 bedroom rate. There are certain criteria that affects what LHA band your tenant is entitled to.
So here are the top 5 rules you need to know:
1. Single claimants under the age of 35 are only entitled to a shared accommodation rate.
2. If the children are the same sex and are under 16 then they are not entitled to different rooms.
3. If the children are under 10 and are different sex then they are not entitled to different rooms.
4. If the children are 16+ and any sex then they are entitled to have separate rooms.
5. If the child has a disability (criteria applies) they are entitled to a different room.
Examples-lets choose an area in the North East – Newcastle upon Tyne:
- Mum and girl (aged 2) and boy (aged 5) = 2 bedroom rate.
- If the children are under 10 and are different sex then they are NOT entitled to different rooms.
- 2 bedroom rate in Newcastle £446.94.
- Mum and girl (aged 9) and boy (aged 12) = 3 bedroom rate.
- The boy is over 10 so is entitled to his own room and therefore a room for him, sister and one for the mum.
- 3 bedroom rate in Newcastle £499.93
So how does this help?
If you have a 3 bedroom property in Newcastle in the private sector and are achieving £400-£450 rent, you can see by accepting a tenant on LHA you can increase this to just under £500! This is applicable in most areas in the North East!
NOW TIME FOR THE DOUBLE WHAMMY!-Super Maxed LHA!
If you truly understand LHA there is an opportunity to maximise the rents even further. You can do this on tenants who qualify by doing separate LHA claims.
Example – if one of the family is over 18 and not in full time education – son daughter, grandmother for example then you have an opportunity to SUPER MAX the rent!
Here’s a real example we did in the last week:
Western avenue, Seaton Delaval – Northumberland council
- Consists of a single mother that has 4 children which breaks down as follows;
- Mum – she is 41 claiming child tax credits, child benefit and income support.
- Daughter is 15 and in full time education
- Son is 1
- Daughter is 18 and calming job seekers allowance
- She has recently split up with a partner and has been renting for 7 years from the council and got good references.
- Her current house was clean and tidy with no issues to raise.
- It was discovered at the home visit when doing the claim form we could super max the rent.
- The advertising rent was £375 PCM however we are super maximising this to £731.89 (this is an increase of £356.89 pcm
- 1 tenancy agreement and 2 claim forms.
How do I understand all of this?
It may seem quite complicated but as long as you have a questionnaire with set questions to ask any new leads then you will be able to make sure that you only show people around your properties that meet your vetting criteria and qualify for the right housing benefit rates.
Would you like to Super Max Your Rent?!?!
If the answer is YES then you need to contact us today and transfer your property. To do this just reply to this email and we will contact you immediately.