The biggest problem caused by the LHA Scheme for Landlords, and the main reason why so many Investors choose not to entertain LHA Tenants, is that the Tenant is now being paid the initial payment and Allowance, and they are not passing it on to the Landlord – in other words – they are spending the rent!
Not all LHA Tenants are like this, but the vast majority that we have come across certainly are, and once the Tenant has been paid it takes months if not years to claw back the arrears – if ever!!
A recent survey carried out by the NLA showed that among the 949 Landlords surveyed, they had 12,869 properties let out to LHA Tenants, and the total rent arrears over those properties was £4.229 million.
Is it any wonder then, that Landlords are avoiding LHA Tenants?
BUT, if you can dramatically increase the chances, almost guarantee, that you will get your rent paid directly to you as the Landlord or Letting agent, by the Local Authority, then DSS tenants wouldn’t be such a sore topic and more Landlords would welcome them as a property investment strategy. Read more…
How quickly should a claim be paid?
Once the Local Authority has received all of the information and evidence it requires from the Claimant, it must:
• Reach a decision on the claim within 14 days or as soon as reasonably practicable after that
• Notify the persons affected (Claimant and Landlord or Letting Agent) as soon as the claim has been decided
• Make payment within 14 days of the receipt of the claim or as soon as practicably after that
Now the above information is taken straight from the DWP guidance and by using the words “practicably after that” could be taken to mean “when we get round to it”. Read more…
Mention Local Housing Allowance and most landlords will run a mile, but it doesn’t have to be that way. LHA is an opportunity to increase cash flow and produce rental yields that we haven’t seen for years, all you have to do is embrace it
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Knowledge
As the saying goes “Knowledge is power” and with LHA it is certainly the case. Since it was nationally rolled out on April 7th 2008 there has been a distinct lack of information regarding how it works. Quite a lot of councils didn’t have an exact idea of how it worked when it first came out. Obviously this was a complete disaster for landlords hence the immediate hatred of LHA and a noticeable decline in the amount of DSS tenants in privately rented accommodation.
As time went by the councils seemed to get their act together and came up with procedures and safe guards, but the problem was that you could have 3 councils next to each other with 3 very different views on a particular topic, such as paying the landlords direct after the tenant being in 8 weeks arrears. Read more…
