Here at Real Lettings we help people who have experienced homlessness, or who are currently homeless, find homes in the private rented sector. Most of our tenants claim Housing benefit to help with their housing costs.

In 2011 we saw big changes come into effect with regards to Local Housing Allowance (Housing Benefit for private sector tenants) rates as part of the Coalition Governments Welfare Benefit reforms.  Rates have been capped UK wide, causing huge issues in London where market rents are higher than anywhere else in the country. In addition to this, the LHA rates for all sizes of property were cut from the 50th percentile to the 30th percentile. In practice, this means that only one in three properties in every rental area is now affordable to a tenant claiming housing benefit as opposed to the previous one in five.

This has been bad news for many non-working/low earning tenants, has already caused some landlords to leave the Housing Benefit market and we will only really start to see the true impact this year as exisiting claimants start to be affected by the changes.

The next change the government announced was to the age criteria for eligibility for the One Bedroom Rate. This came into effect on January the 1st and will cause big issues for many 25-34 year olds across London and the UK.

So what exactly has changed?

Prior to this change coming into effect on the 1st January, single individuals under 25 years old were only entitled to the rate of Local Housing Allowance for a room in a shared property. This is called the Shared Accommodation Rate.

However from the 1 January 2012, the Government have expanded this restriction so that it now applies to single people under 35 years old. 

As a result of these changes, single people under 35 years old will only be entitled to the rate of Housing Benefit for a room (with shared use of a kitchen, living room and bathroom) and not the rate for a self contained dwelling.

For many 25-34 about to or already claiming housing benefit, this means that the amount they receive will reduce significantly.

Who will be affected?

Tenant's will be affected by these changes if they are single, aged 25 to 34,  living alone, renting or about to rent self contained accommodation from a private landlord, and receiving or about to claim Housing Benefit.

This change will affect both claimants who are being paid under Local Housing Allowance and claimants who are under 35 but still have their claims referred to the Valuation Office Agency (Rent Officer). 

When will the change take effect?

This change will apply to all new claims made on or after the 1 January 2012. Existing Housing Benefit claimants, whose claim commenced before 1 January 2012 may have more time before their benefit changes and should contact their housing benefit office to find out if and when they will be affected.

Will anyone under 35 be exempt from these changes?

A small number of tenants will be exempt from this change and will be able to claim or keep the self contained one bedroom rate of LHA. Those eligible for exemption will be:

-individuals that receive a severe disability premium;

-care leavers

-certain ex-offenders; who could pose a risk of serious harm to the public;

-people who have lived for three months in a homeless hostel or hostels and have been supported to resettle in the community.  

There are some conditions attached to these exemptions though and so we would suggest that you visit your local CAB or your housing benefit office for advice.

What you should do if you are a tenant under aged 25-34 and living in self contained accommodation?

- Contact your Local Authority's Housing Benefit office immediately to find out if you are going to be affect and if so when and how.

- Talk to your landlord.  If you are going to have your benefits reduced, your landlord will appreciate you being upfront about it and is likely to give you more time to find a property you can afford. He or she may even be willing to help you find somewhere else by talking to the landlords of potential rooms or properties and recommending you as a good tenant.

- Don't bury your head in the sand and hope that the problem goes away. Get some advice and as soon as possible.

What you should do if you are a landlord letting self contained accommodation to  a tenant under aged 25-34?

- Some tenants are afraid to inform their landlords when they are claiming Housing Benefit so even if you don't think your tenant is claiming, it could be worth checking with them. If they are claiming and are going to be affected by the new changes then they soon might find themselves unable to pay all of their rent.

- Try to work with your tenant to help them find a solution.  Could the property be suitable for two people sharing the same rent? Could you help the tenant find a new property by speaking to potential landlords and recommending them?

Local Authorities and Advice agencies will undoubtedly advice the tenant to stay put until evicted else they will not be helped with emergency accommodation should they find themselves homeless. The more you can do to help your tenant find alternative accommodation, the more likely and quickly they are to move out willingly, thus giving you vacant possession of your property for new tenants.

- Remember that these are upsetting and unsettling times for tenants who have been settled in a home and area and suddenly find themselves in a situation where they can't afford to keep renting your property and have to move.

Real Lettings and the Lambeth Tenancy Rescue Service

For the last 6 months Real Lettings have been working with the London Borough of Lambeth to help those claiming Local Housing Allowance in the borough identify if and when they will be affected by the various changes. If you are a tenant claiming Local Housing Allowance via Lambeth and have not already spoken to The Broadway Lambeth Tenancy Rescue team, please do get in touch so that we can help you. The number to call is 020 7710 0660.