How is the LHA set?
26th Oct 2010

How is the LHA set?

The LHA is a flat rate benefit, although how much of this flat rate received does depend on a means test – see the ‘How much will a tenant receive’ section.

The flat rate used to be based on the median (50th percentile) actual market rent in a given geographical area, known as a Broad Rental Market Area, BRMA. The market rent is determined by the Valuation Office Agency (VOA) who collect actual rental information submitted by local landlords.

The LHA is a flat rate benefit, although how much of this flat rate received does depend on a means test – see the ‘How much will a tenant receive’ section.

The flat rate used to be based on the median (50th percentile) actual market rent in a given geographical area, known as a Broad Rental Market Area, BRMA. The market rent is determined by the Valuation Office Agency (VOA) who collect actual rental information submitted by local landlords.

The Government changed this in April 2011 and now LHA rates are based on the 30th percentile of actual market rents. The LHA rate accessible for a particular household can be found on the LHA Direct service on the DirectGov website – see the Additinal Resourses section below.

These changes immediately affect all new LHA tenancies and those tenancies where there is a change of circumstances or are up for renewal. Existing tenancies, with no change of circumstances were protected from these changes for 9 months from April 2011.

The LHA rates are reviewed once a month by the Valuation Office Agency (VOA). These are published by the Local Authority, usually in the Housing Benefit section of the council website.

The published rates are normally the:

  • Shared Accommodation Rate
  • 1 bedroom rate
  • 2 bedroom rate
  • 3 bedroom rate
  • 4 bedroom rate
  • (5 bedroom rate removed from April 2011)

Until 6th April 2009, the Valuation Office Agency could calculate other, higher rates, if required by the Local Authority, such as 6 bedroon rates and above. Now, the maximum claim is for the 4 bedroom rate.

Additionally, since April 2011, all LHA rates are capped at a maximum:

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

There are transitional arrangements for those previously on 5 bedroom or higher rates, who may change to the 4 bedroom rate upon the anniversary of their claim. There is a ’26 week protection’ and anyone affected should contact their Local Authority for details.

The rates for a given month are usually published one week in advance i.e. the rates for May would normally be published in the last week on April.