NLA questions new housing allowance scheme

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The gradual implementation of the government's new Local Housing Allowance (LHA) will have far-reaching implications for landlords with tenants on benefits.

That's the opinion of the NLA, which said that the most obvious change would be that the new LHA - which will completely replace the previous Housing Benefit (HB) scheme by April 2008 - will be paid directly to the tenant.

This means that the tenant will take on responsibility for paying rent.

NLA chairman David Salusbury commented: "At present landlords who provide homes to people on housing benefit generally have the security of knowing that they will receive rent direct from the local authority.

"Under the new arrangements, the local housing allowance will be paid into the tenant's bank account, and the onus will be on them to pay the rent to the landlord.

"This leaves open the possibility that the tenant may be tempted to use the money for something else and not pay their rent. This might be because of other pressing financial needs, but it could lead to them getting into arrears. Ultimately that could threaten the security of their home."

Mr Salusbury also warned that the way LHA is calculated could mean that some tenants do not receive the total cost of their rent. However, he did acknowledge that the scheme offered tenants a greater degree of flexibility.

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