3.14 Local Housing Allowance
Local Housing Allowance (LHA) is a flat rate allowance paid to housing benefit claimants. It is updated annually, each April.
LHA applies to private sector tenants who make a new claim for housing benefit or those claiming housing benefit who change address. It also applies to tenants on housing benefit who move from the social sector into private sector accommodation.
Rent Officers determine 5 different LHA rates for the following categories of property: Shared accommodation (room in a shared property), 1 bedroom, 2 bedrooms, 3 bedrooms and 4 bedrooms.
3.14.1 How Is The LHA Calculated?
The Rent Officer maintains rental information for each category of LHA rates. These are the list of rents.
Mathematical calculations are applied to the list of rents to determine the LHA rate which is set as the lower of:
- the 30th percentile on a list of rents in the Broad Rental Market Area
- the existing LHA plus an uplift of 1%
- the existing LHA plus an uplift of 4% (only selected LHA rates in specific BRMAs set out in the regulations)
LHA rates can not be higher than the following maximum weekly rents (correct June 2018) :
- £260.64 for one bedroom exclusive use (or a shared room)
- £302.33 for 2 bedroom accommodation
- £354.46 for 3 bedroom accommodation
- £417.02 for 4 bedroom accommodation
The list of rents is a representative sample of private sector rents paid across the BRMA, including those from the lower end through to the upper ends of each rental market.
A graph showing the list of rents for each applicable LHA category can be found on the LHADirect – Local Housing Allowances (LHA) webpage – https://www.gov.uk/government/publications/understanding-local-housing-allowances-rates-broad-rental-market-areas and the rental information is provided to Rent Officers by landlords, letting agents and tenants.
3.14.2 What Is A Broad Rental Market Area (BRMA)?
The BRMA is the geographical area used to determine the LHA rate. It is an area where a person could reasonably be expected to live taking into account access to facilities and services for the purposes of health, education, recreation, personal banking and shopping.
When determining BRMAs the Rent Officer takes account of the distance of travel, by public and private transport, to and from these facilities and services.
Rent Officers consult with local authorities when they determine and review the BRMAs. The boundaries of a BRMA do not have to match the boundaries of a local authority and BRMAs will often fall across more than one local authority area.
VOA Rent Officers provides the local authorities with information that identifies the BRMAs and which properties fall into them.
3.14.3 Number Of Bedrooms
The maximum LHA that someone is allowed to claim is dependent on the size of their household. This is worked out as follows:
If the claimant is under 35 years and single, that person will only be entitled to a maximum of the shared room rate. Otherwise, claimants are entitled to one bedroom for:
- every adult couple
- any other adult aged 16 or over
- any two children of the same sex under 16
- any two children under 10 regardless of sex
- any other child
(This would be the maximum LHA that a claimant could receive. What a claimant will eventually receive when their claim is assessed is dependent on their household income).
The council may reduce someone’s Local Housing Allowance if they share their home with adults who are not dependent on them – for example, adult sons or daughters, parents, relatives or friends. It is assumed that they should pay something towards the rent, whether they do so or not.