Introduction

I’m going to attempt to explain the much publicised 30 percentile reduction in LHA rates as it seems to be causing worry amongst landlords. The reality however is that there is no need to worry too much. I accept that there is going to be a reduction but because of how the formula works, in real terms, the reduction will be nearer 10% as it’s not a simple 30% of the LHA rate from April 2011. Allow me to explain:

Firstly, below is going to be a really brief summary as the formula is quite complicated. The main thing to remember (as suggested above) is that it is not a 30% reduction in the actual rate. Currently, a median value is taken of all rates in a given area. The changes simply alter this calculation to be a 30% median value.

Rent officer duties

Firstly, a rent officer must create a list of all rents within their area. This list must be made up of true market value properties and non of the rents must contain housing benefit tenants (thereby reflecting true market value). There are other conditions but these aren’t relevant for now.

There must be one list for each type of property, so one list for one bedroom, one list for two bedrooms going up to four bedrooms (currently five bedrooms but that will be removed from April).

So, let’s take an example of one bedroomed properties in an area. Of course, in reality the list will be extensive with hundreds if not thousands of rents. Importantly, the list must be produced ... Please login or signup to continue reading this content

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