Landlord changes to housing benefit from April 2011

The government has announced changes to housing benefit from April 2011.

This will affect tenants renting a property from a private landlord and receiving housing benefit which is based on local housing allowance.

These changes may mean that the amount of housing benefit your tenants receive may go down.

What is changing?

From April 2011

There will be maximum rate caps, so that local housing allowance weekly rates in any area cannot be more than:

£250 for a one-bedroom property
£290 for a two-bedroom property
£340 for a three-bedroom property
£400 for a four-bedroom property

These caps will probably only affect tenants who live in London, especially in the centre of London.

There will no longer be a five-bedroom local housing allowance rate. The maximum level is for a four-bedroom property.

Local housing allowance rates will be reduced to a lower amount, so that about three in ten properties for rent in the area should be affordable to people on housing benefit. At the moment about five in ten properties in each area are affordable to people receiving housing benefit.

We will have more discretion to pay housing benefit directly to you. But we can only consider doing this in very specific circumstances where it would help the customer secure a new tenancy, or remain in their current home at a reduced rent.

When will these changes affect my tenants?

For those tenants already receiving housing benefit, the amount they get may change when we review their claim after April 2011. When this will affect your tenants' benefits will depend on their specific circumstances. We will write to them telling them how and when they will be affected.

However, if your tenant is making a new claim for housing benefit, moving home, or they have a change in their circumstances on or after 1 April 2011, the changes will apply sooner.

What do I need to do?

It is important that you discuss the potential implications that these changes may have on your tenants who are receiving housing benefit before you agree to renew their tenancy agreement.

Is there any other help available to my tenants to assist them with their housing costs?

The council receives some funding from the government to provide claimants with further financial assistance with their housing costs where it is considered to be appropriate. This is known as discretionary housing payments.

Discretionary housing payments can be made where there is entitlement to housing and/or council tax benefit and there is a shortfall in the amount of rent and/or council tax that they pay and the amount of housing and/or council tax benefit they receive.

Each request for a discretionary housing payment is considered by the council on a case-by-case basis and claimants will need to provide full details of their circumstances.

However, it should be noted that the amount of funding available is cash limited and will not make up the full losses resulting from these changes. Most discretionary housing payment awards are made only for a short period of time to allow the claimant time to review their circumstances.