Changes to LHA rent rules come into effect

08 2008
The government has launched a new scheme which will see the way in which tenants who receive a local housing allowance (LHA) pay their rent to buy-to-let property investors.

Until now, the LHA was paid directly to the landlord, thereby ensuring that they were paid on time every month.

However, now the money will first go to the tenant who will then pass it onto the landlord, a move designed to give those renting accommodation greater financial capabilities and more freedom to choose where they live.

According to the government's Department for Work and Pensions the scheme will also help claimants to come off of benefits.

Stephen Timms, minister for employment and welfare reform, said it will "help people take action towards managing their own bank accounts, making it easier for them to move off benefits and in to work."

However, the move has been met with caution by some landlords' groups, who argue that they will be at greater risk of missing out on receiving a regular rental income, putting many private investors at considerable financial risk at a time when mortgage lenders are putting repayment levels up.ADNFCR-1219-ID-18541931-ADNFCR

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