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Top 10 locations for LHA searches

Monday 29th July 2013

Investors who opt to invest properties with a view to letting them to tenant who qualify for Local Housing Allowance (LHA) can generally expect to earn among the highest rental returns in the UK, especially as demand from tenants in this area of the market is growing. But where in the UK is seeing the greatest level of growth in tenant inquiries?

According to new research from Dssmove.co.uk, searches for LHA properties in London and the Home Counties have increased by 400% in the last three months.

The greatest demand for LHA property on the website is in London, where nearly 15,000 prospective tenants are searching each month, followed by Leeds and Manchester with 1,000 respectively.

The top 10 locations in the UK for LHA searches over the last three months are as follows:

1) London – 36%

2) Leeds – 4%

3) Manchester - 3.7%

4) Birmingham - 3.3%

5) Liverpool - 2.3%

6) Wolverhampton - 1.9%

7) Sheffield - 1.7%

8) Croydon - 1.6%

9) Newcastle Upon Tyne - 1.5%

10) Cardiff - 1.3%

Aki Ellahi, Founder of Dssmove.co.uk, comments: “The sharp rise in London searches is partly due to the new £500 weekly benefit cap that came into effect on 15 July, which is making it impossible for tenants to rent in certain parts of London. Demand is outstripping supply. We are receiving hundreds of emails every week from LHA tenants desperately looking for London property. There is a huge shortfall of LHA properties in the area and many more private landlords are needed in London and the South East to meet demand.

“The good news is that many more landlords are happy to take on LHA tenants. Our recent research shows that shows that nearly 75 per cent of landlords and agents are happy to let their properties to LHA tenants, while over half of respondents believe that LHA tenants are no more troublesome than private tenants.

“My advice to private landlords who are thinking on taking LHA tenants for the first time is that they should educate themselves on the local housing benefit systems. i.e. Do councils pay tenants 2 weekly, 4 weekly or calendar monthly? Once landlords know this information, they can structure tenancies accordingly to ensure payments go to credit unions correctly for the tenancy period.

“So if tenants are paid fortnightly, then it’s best to start and end tenancies on coincide with these fortnightly dates, so that the correct housing benefit payments go to the Credit Union. If a tenancy is set up and payment due date does not coincide with the LHA payment, then it is doomed to fail.”

Currently there are over five million people claiming LHA. In many inner-city areas LHA rates are sometimes higher than the market rent. Therefore in order for landlords to achieve this higher rent yield, they need to move into the DSS market as private tenants will not pay the same level of rent in some areas.

Dssmove.co.uk is a property portal, open to both landlords & letting agents and is free of charge. Dssmove.co.uk works with over 700 landlord and lettings agents nationwide and has over 5,000 properties on its site. The site also has over 50,000 visitors a month.

              

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