There have always been criticisms of the new Local Housing Allowance (LHA) scheme, for example see this report here I did in October 2007. Shelter have now issued further criticism of the scheme after surveying “more than 450 LHA claimants” (although perhaps not the most comprehensive survey – 1,000 would have been better). Their findings indicate that the scheme is failing both landlords and tenants, and is in urgent need of reform.

Shelter report that their survey shows that

• 81 per cent of people said they found it fairly or very difficult to find a suitable home that was affordable.
• 59 per cent of claimants said they had to make up shortfalls in their rent, and.
• Many respondents were doing this by going without essentials such as food or sufficient heating

One of the main problems identified by Shelter in their report is that the boundaries of LHA areas are too wide.  This means that in some areas tenants simply cannot afford the rents, and in others landlords are putting rents up to more than the market rent, as they know that the LHA allowance is higher.

Another problems is the fact (which has always been strongly criticised by landlords) is that LHA is paid direct to tenants and cannot be paid direct to landlords as before.  Shelter says

The LHA system was also intended to give claimants choice and promote financial responsibility by paying rent money directly into their bank accounts rather than directly to their landlord. However, Shelter’s research has found that this system has contributed to more than a quarter of claimants falling behind on their rent payments.

The majority of claimants who had experience of both payment methods said they would prefer to have the money paid directly to the landlord.

Evidence from landlords also shows that a growing number are refusing to let to LHA claimants because of rent arrears due to the new payment method. Shelter’s research shows 60% of respondents found it difficult to find landlords who are willing to let to them as LHA claimants.

Well we all know that. Research by the National Landlords Association came to a similar conclusion.

It does look though, as if some sort of change if not reform is on the cards. This report here on the BBC site  states that Government plans to do away with current arrangement which allows people to keep up to £15 if they find housing at a lower rent than the level of housing allowance set by their local authority, are due to be delayed until  2011 “as part of a wider reform of housing benefit”

We will have to wait and see what this “wider reform” consists of, but landlords will be hoping that it will re-instate the right for benefit to be paid direct to them.  After all the Tories have already said that this is what they will do if they come into power.

**STOP PRESS!! My spies at the NLA tell me that the DWP will publish their Housing Benefit Reform consultation report shortly**

Housing charity Shelter are jubilant after succeeding in saving the home of Paul Amanda Jackson of Shrewsbury, where they had lived for over 20 years.

According to the BBC report, Mr and Mrs Jackson entered a sale and rent back deal with a company, Repossessions Stopped, in 2005 after getting into mortgage arrears. However two years later they faced repossession from Repossessions Stopped’s mortgage company after they fell into arrears with their mortgage payments. Apparently Repossessions Stopped (described by the Judge in this case as ‘dishonest’), had paid only £63,000 for the property, despite it having a market value of £100,000, and had assured Mr and Mrs Jackson that they could live in it for the rest of their lives.

Thankfully for them, Shelter stepped in to assist and a judge at Birmingham County Court has ruled they can stay there and pay rent. The Shelter report states that His Honour Judge Worster has ruled that the family can either revert to being owner-occupiers, or rent the property for the rest of their lives, with their daughter inheriting the tenancy.

The news reports I have seen just state the order made and not the legal reasons for them, so it will be interesting to read the report of the Judgement when it comes out.

PS There is now an excellent analysis of the legal points on the Nearly Legal web-site here.

According to a report on the Shelter Scotland web-site, one in four rented properties in Scotland is not covered by the Scottish registration scheme, which came into force three years ago today.

It is not all bad news. The report says that the registration scheme has been an impetus to set up landlord training and advice services. However it is of concern that a quarter of Scottish properties still appear to be outside the scheme.

The Shelter report has a number of recommendations, which include more money to Local Authorities and a campaign to raise awareness.

Although we do not have a registration scheme as such in England and Wales, this was recommended by the Rugg Report which was published last year. However this may be kicked into the long grass now, if ministers that the view that results from the Scottish scheme show that more funding will be required than was originally anticipated. Particularly in view of the current financial crisis.

Shelter is a great force for good in this country and thousands of tenants and homeless people will be forever grateful to it for its help.

As they say on their web-site “Shelter believes everyone should have a home. We help people find and keep a home. We campaign for decent housing for all”.

They offer some brilliant services. For example:

• They have a free housing advice helpline – 0808 800 4444
• They have numerous advice offices where you can visit for free help and advice
• They campaign tirelessly – see here on their part in the recent assistance given to prevent repossessions
• They publish an excellent magazine Roof (reviewed by me on Landlord-Law here)
• And they also have many resources for professionals

If you want to donate – click here