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Top tips for successfully handling LHA tenants

Monday 3rd June 2013

Despite the bad press that they have had in recent years, research shows that more and more landlords and agents are happy to take on Local Housing Allowance (LHA) tenants.

The study, conducted by Dssmove.co.uk, shows that nearly 75% 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. However, the biggest fear surrounding LHA tenants is rent arrears, with 61% of respondents citing this is a major concern.

Just 33% of landlords and agents are concerned about fraud and criminal activity with LHA tenants, but nearly 50 per cent believe there is little difference between LHA and private tenants. What’s more, almost 40% of respondents believe LHA tenants care for their property as much as private tenants.

Aki Ellahi, Founder of Dssmove.co.uk, commented: “Our research demonstrates that attitudes to LHA tenants are changing. If landlords and agents know how to deal with LHA tenants, then they can enjoy the benefits of potential higher rental income, reduced void periods, lower arrears and longer tenancies. More and more landlords and agents can see the commercial benefits of letting to LHA tenants

“I have been a landlord for over ten years and all my properties are occupied by LHA tenants and I have experienced very few problems over the years. I have currently 500 tenants on benefits and achieve a rent collection record of 100%. I would not be able to achieve this level of success without the use of Credit Unions. Using such organisations to collect housing benefit and pay this across to the landlord or agent is very convenient.

“My experience over the years has shown me that tenants do not want the hassle of dealing with housing benefit. Although they understand that they need to apply for housing benefit, they prefer if the landlord or an agent, who can assist them with doing this on their behalf, as this has been the case for as long as l remember. The temptation to spend housing benefit can be far too great for tenants and you often find tenants falling into a debt trap by using housing benefit payments for living costs on a short term basis – ‘robbing Peter to pay Paul’. So by landlords helping tenants to avoid this temptation and providing the rent is affordable, this is sound reason for a long and secure tenancy to be enjoyed by both parties.

“We’ve used five or six different Credit Unions, some better than others. Some pay landlords the same day housing benefit is received, some take five days and the worst I’ve experienced is 60 days. Some charge £1.50 per payment and the most expensive I’ve experienced is £10 per payment. So I think Credit Unions are great, providing they can pay landlords quickly and relatively cost effectively.”

Dssmove.co.uk has put together tips for successfully handling LHA tenants:

+ Always use a credit union or similar organisations which can facilitate in sending housing benefit to you on behalf of the tenant.

+ Where possible, hand deliver housing benefit claim forms to the local council’s benefit department to prevent delays.

+ Ensure tenants have the correct proof of benefits before creating a tenancy.

+ Keep on file copies of the benefit letters the tenant shows you before they move in. These are so important as you need proof of the tenant’s National Insurance number which is unique to the tenant.

+ Chase your local council weekly of the progress of all housing benefit eg new claims and outstanding queries.

+ Procure and end tenancies on housing benefit payment dates to prevent the tenant owing you rent when they leave.

              

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