How does housing benefit work are there specific problems or things a landlord needs to know when letting to tenants on housing benefits who offer to pay a top up.
Guidance here Universal credit housing element - Shelter England
Check the Max LHA for the property. You need to understand whether /how they will be able to top up or will just fall into arrears. Council wont be your friend- they won’t get involved trying to rehouse till last possible point when you are about to evict with bailiffs- they don’t want to have extra nearly homeless people to house, which costs them.
Don’t expect LHA to increase any time soon so it will become harder for them to afford even if you can keep rent increases low
"Local Housing Allowance (LHA) rates—which determine the maximum housing benefit for private renters—last increased in April 2024. [1]
During that update, the government raised LHA rates to cover the lowest 30% of local market rents. However, after this temporary boost, the rates were frozen in cash terms again, and Shelter England confirms they are slated to remain at the 2024/25 levels until at least April 2027"
As with anybody else check for evidence of affordability, a guarantor is better if any doubt
Risks are different
"2. By Welfare Status (Universal Credit)
- Renters receiving Universal Credit (UC) are at a much higher risk of falling behind.
- National Housing Federation data reveals that 51% of residents paying by Universal Credit are in rent arrears, compared to just 36% of residents paying by other means
Source: National Housing Federation National Housing Federation - Our research on Universal Credit and rent arrears "
But note under RRA blanket bans on those on benefits are rental discrimination and not allowed
(Sorry if all v obvious)
Good luck
Tenants are paid the benefit direct in most circumstances. Some councils allow landlord to be paid direct but tenant can cancel this arrangement.
It can take several weeks for claims to be processed.
I would be wondering how relying on top up means they can still afford to live.
2 Likes
Be aware that if you are directly receiving LHA from council then you are legally bound to report any changes in the T’s circumstances which would affect LHA rate to the council. If they get work, for example, but don’t tell the council, you’ll be liable for the overpayment and potential fine for not informing them.
Something to bear in mind.
1 Like
Thanks. It’s 2 people. One has a part time job whcih he says will cover the extra. I don’t really know how having a part time job impacts on the housing benefit I guess I’ll have to ask
Thanks for the info. Non of it is obvious to me
1 Like
Definitely something to bear in mind, thanks