Kensington And Chelsea Council Statement On Housing Benefit

[CrashConnoisseur]

...first and foremost is the fact that Local Housing Allowances are set by local authorities but paid by the central government.

LHA rates are set by the District Valuer Service (DVS) which is part of HMRC.

DVS:

http://www.voa.gov.uk/dvs/index.html

DVS is the commercial arm of the Valuation Office Agency (VOA) and provide professional property advice across the public sector.

'About the Valuation Office Agency';

http://www.voa.gov.uk/corporate/about/index.html

The Valuation Office Agency is an executive agency of HM Revenue & Customs (HMRC). We provide the Government with the valuations and property advice required to support taxation and benefits. We also deliver a range of statutory and non-statutory valuation and surveying services to over 4,000 public sector bodies.

The Valuation Office was formed in 1910 and celebrated its centenary in 2010.

[Tired of Waiting]

LHA rates are set by the District Valuer Service (DVS) which is part of HMRC.

DVS:

http://www.voa.gov.uk/dvs/index.html

'About the Valuation Office Agency';

http://www.voa.gov.uk/corporate/about/index.html

Thanks.

I dug a little deeper and found this: http://www.landlords.org.uk/in-my-area/bulletins/local-housing-allowance-rates

:angry:

I think we need to dig a little more.

[richc]

To receive £2000.00 per week HB in central London last year you would have to require a five bedroom property under the LHA rules. This means you would need to have a minimum of four children, but due to the rules about sharing bedrooms and age and gender it would be more likely that the average household qualifying for that rate had seven or more children. Alternatively the household could comprise five adults or more who each required a bedroom.

Someone with 4 wives and 1 child would be eligible to claim maximum housing benefit. Or 2 wives, 2 grandparents and one child. It's not that hard to meet the requirements for certain people.

[Tired of Waiting]

LHA rates are set by the District Valuer Service (DVS) which is part of HMRC.

DVS:

http://www.voa.gov.uk/dvs/index.html

'About the Valuation Office Agency';

http://www.voa.gov.uk/corporate/about/index.html

" Rent Officers ask landlords, letting agents and other sources to provide information on market rents to use as comparables. "

:angry:

http://www.voa.gov.uk/corporate/RentOfficers/dataProtectionSecurity.html

[The Floating World]

I do hope you are right. But IIRC it was even worse than I've summarised above. IIRC the "data" (average local rents) is collected by Local Authorities consulting local letting agencies!

Can you please confirm that I am wrong? I will be very happy if I am. Really.

Any link?

Local Authorities have zero influence and do not provide the data required to determine LHA rates. Here is a link concerning the LHA methodology:

http://www.voa.gov.uk/corporate/RentOfficers/index.html

As the LHA is meant to reflect the actual market in private rented properties the data has to be provided from the market.

A marketplace which is largely run by estate agents and professional landlords.

LHA restrictions on private rents reflect the older practice of Rent Officer referral and restriction of Housing Benefit which was put into place following the de-regulation of the rental market in 1989. Prior to that there was no problem with HB expenditure rising above inflation as rents were regulated.

There are some rents from tenancies dating from before 1989 which are still regulated and are considerably below current market levels.

De-regulation was explicitly intended to lead to higher rents as the argument was made at the time that rent controls unfairly restricted economic competition and as a result there were no incentives to the market to increase the supply of privately rented property.

[Tired of Waiting]

Local Authorities have zero influence and do not provide the data required to determine LHA rates. Here is a link concerning the LHA methodology:

http://www.voa.gov.uk/corporate/RentOfficers/index.html

As the LHA is meant to reflect the actual market in private rented properties the data has to be provided from the market.

A marketplace which is largely run by estate agents and professional landlords.

(...)

Thanks TFW,

It is getting worse and worse:

" Valuation Office Agency Rent Officers

Rent Officers work within the private rented sector in England, providing valuation services for local authorities, landlords and tenants. Independent of commercial interests, Rent Officers work with thousands of professional landlords and letting agents to compile a unique view of the private rented sector. Rent Officer valuations and determinations are currently based on information from around half a million private rents agreed within the previous twelve months. "

http://www.voa.gov.uk/corporate/RentOfficers/index.html

And how do the "work together"? Landlords and letting agents just fill-up this form:

http://www.voa.gov.uk/corporate/_downloads/pdf/Lettings_Information_Submission.pdf

And "inform" the VOA about some local rents. Simples.

De-regulation was explicitly intended to lead to higher rents as the argument was made at the time that rent controls unfairly restricted economic competition and as a result there were no incentives to the market to increase the supply of privately rented property.

Yes, I am familiar with the economic theory behind it, and I agree with it if a country doesn't have our planning blockage. But add a planning blockage to that mix, and it becomes one of the most stupid housing policy in this planet.

Edited July 6, 2011 by Tired of Waiting

[The Floating World]

" Rent Officers ask landlords, letting agents and other sources to provide information on market rents to use as comparables. "

:angry:

http://www.voa.gov.uk/corporate/RentOfficers/dataProtectionSecurity.html

Here is a list of data sources used by Rent Officers and by extension in the determination of LHA:

http://www.voa.gov.uk/corporate/publications/Manuals/RentOfficerA-Z/l-roh-lettings-information-sources.html#P76_776

You will note that only unsuccessful Housing Benefit claims can be used as a source of data regarding rents, although it says that steps are being taken to gather this information I know that this does not happen. The use of data from live Housing Benefit claims is not allowed so that Housing Benefit claims do not distort the market data.

[50sQuiff]

Odd thing is, there's no arguing with some people. Close members of my family are pretty open about their support of this system, stating that (more or less) 'If we overpay some/pay undeserving cases to ensure that one deserving case does not go without, then that's fine by me'. They also take the line that since this policy also increases diversity in traditional homogenous areas it is therefore a good thing which should be funded seemingly without limit to ensure that plumbers and admin staff can live in Chelsea beside lawyers etc.

They are fully paid-up Looney Lefties who never allow common sense to encroach on a f*cking stupid idea. When I asked why working people in small provincial towns across the UK ought to pay taxes for the capital's social engineering, they take the disdainful metropolitan leftie view that the provinces are beneath concern and ought to pay up because London is 'worth it'. You gotta hand it to them, the intellectual gymnastics required to arrive at that sort of attitude, from an initial position purportedly borne out of concern for the worst off in society, is quite a feat.

Their extreme nutty views have pretty much destroyed our relationship though. Unfortunately these views are not uncommon and their prevalence within the London left-wing middle class prickocracy, which includes the BBC, politicians etc, is responsible for many of the financial and social woes of the nation, I'd venture.

The selfishness of Socialism is boundless.

Superb diatribe Unfortunately I know these people well and it's not good for my health.

[Tired of Waiting]

Here is a list of data sources used by Rent Officers and by extension in the determination of LHA:

http://www.voa.gov.uk/corporate/publications/Manuals/RentOfficerA-Z/l-roh-lettings-information-sources.html#P76_776

You will note that only unsuccessful Housing Benefit claims can be used as a source of data regarding rents, although it says that steps are being taken to gather this information I know that this does not happen. The use of data from live Housing Benefit claims is not allowed so that Housing Benefit claims do not distort the market data.

Actually that is a suggested list of possible data sources.

And it does include:

Housing Associations and Local Authorities

Local authorities and housing associations may let properties at market rents outside of their usual core work. Rent Officers may be able to consider these lettings as confirmed information. Consideration must be made by the Rent Officer of any scheme used by an LA or HA that may be different from the usual PRS market (example, points based lettings, etc)

Local Authority Housing Benefit Departments

Local authority housing benefit departments can supply details of tenancies where payment of housing benefit was declined for genuine reasons. Rent Officer Functions teams are working with DWP and LAs to encourage local authorities to supply this information automatically.

Edited July 6, 2011 by Tired of Waiting

[leicestersq]

" Rent Officers ask landlords, letting agents and other sources to provide information on market rents to use as comparables. "

:angry:

http://www.voa.gov.uk/corporate/RentOfficers/dataProtectionSecurity.html

Where there are subsidies, there is fraud and corruption.

That is why the notion of social housing grates.

We need a market solution.

[Tired of Waiting]

Where there are subsidies, there is fraud and corruption.

That is why the notion of social housing grates.

We need a market solution.

I didn't/don't think it is corruption, in the sense that these officers are taking bribes. But I bet that for laziness sake and cutting dept costs they don't travel that much "to the field", and most probably rely on that PDF form filled up by landlords and agents and sent to them via the website. Easy, "job done".

Though it is a kind of cavalier and negligent attitude with tax-payers' money, of course.

Edited July 6, 2011 by Tired of Waiting

[leicestersq]

I didn't/don't think it is corruption, in the sense that these officers are taking bribes. But I bet that for laziness sake and cutting dept costs they don't travel that much "to the field", and most probably rely on that PDF form filled up by landlords and agents and sent to them via the website. Easy, "job done".

Though it is a kind of cavalier and negligent attitude with tax-payers' money, of course.

Having a bit of an inkling as to what it is for, do you believe that landlords always and everywhere complete this form honestly?

[CrashConnoisseur]

Thanks.

I dug a little deeper and found this: http://www.landlords...allowance-rates

:angry:

As that article highlights, rental data is obtained from actual rental aggreements (not advertised rents) where the tenant does not claim LHA. When collecting such data Rent Officers are directed by law to “assume that no-one who would have been entitled to housing benefit had sought or is seeking the tenancy”. LHA rates are therefore set by what non-HB claimants agree to pay for rent.

I think we need to dig a little more.

You do; from this and other threads it's clear that you have little understanding of how Housing Benefit works or the implications of the government's cuts.

[leicestersq]

As that article highlights, rental data is obtained from actual rental aggreements (not advertised rents) where the tenant does not claim LHA. When collecting such data Rent Officers are directed by law to “assume that no-one who would have been entitled to housing benefit had sought or is seeking the tenancy”. LHA rates are therefore set by what non-HB claimants agree to pay for rent.

I would be interested to know how they achieve that. Rentals are in a market place and there is always the possibility that HB'ers can bid. Even knowing that they are there has an affect on the prices.

You do; from this and other threads it's clear that you have little understanding of how Housing Benefit works or the implications of the government's cuts.

Well I claim to be totally ignorant. I have precious little understanding, but plenty of disbelief as I learn more. As for the implications of all this, does anyone really know?

[bomberbrown]

<br />Where there are subsidies, there is fraud and corruption.<br /><br />That is why the notion of social housing grates. <br /><br />We need a market solution.<br />

<br /><br /><br />

Well all I can say is thank god council housing and some types of social housing aren't subsidised then. I dont deny there are backhanders and favourtism probably going on in social housing allocation, but fraud and corruption happen everywhere, look at our own MPs for Christ's sake, but that's no reason the throw the baby out with the bathwater. .

[tomandlu]

" Rent Officers ask landlords, letting agents and other sources to provide information on market rents to use as comparables. "

:angry:

http://www.voa.gov.uk/corporate/RentOfficers/dataProtectionSecurity.html

TBH and afaics it doesn't make much difference whether they do the job fairly and correctly or not, it will still distort the market. Even if they exclude HB rentals, the shortage of private rentals will have a inflationary effect.

Excluding the obvious solution (more social housing, HB only available for SH), I would suggest the following:

• Include HB rentals in establishing local rents

• Set HB at <50%

AFAICS this will mean that, as the proportion of HB in a given area goes up, rents will go down for HB. At some point this will then push landlords into renting more to private tenants, which will have an upward pressure on HB allowances. In other words, with the right level of HB as a percentage of average rents, an equilibrium will be reached.

Bottom line is that as soon as a LL can get more money from HB than they could get renting the same property to a private tenants, then you know the system is screwed...

[bomberbrown]

<br />As that article highlights, rental data is obtained from actual rental aggreements (not advertised rents) where the tenant does not claim LHA. When collecting such data Rent Officers are directed by law to "assume that no-one who would have been entitled to housing benefit had sought or is seeking the tenancy". LHA rates are therefore set by what <b>non-HB  claimants</b> agree to pay for rent. <br /><br /><br /><br />You do; from this and other threads it's clear that you have little understanding of how Housing Benefit works or the implications of the government's cuts.<br />

<br /><br /><br />

Can you anwer me this? Since LHA is paid directly to the recipient and not to the landlord (except in exceptional circumstances), how the hell can a landlord know if a tenant is in receipt of LHA or not for the purpose of that form?

[The Floating World]

Actually that is a suggested list of possible data sources.

And it does include:

If you look at the data which can be obtained from the LA it concerns properties which they let at market price (outside the usual council housing channels, therefore acting as a commercial landlord) and unsuccessful Housing Benefit claims (not actual live claims).

That is why I commented on the list of data sources below the link. Local Authorities do not provide lists of rents to the VOA from their HB caseload.

[Lepista]

Having a bit of an inkling as to what it is for, do you believe that landlords always and everywhere complete this form honestly?

It's fine, as long as the form is them passed to the taxman for determining the amount of tax they should pay.

Any other way, and it would be open to fraud and corruption.

[Tired of Waiting]

Having a bit of an inkling as to what it is for, do you believe that landlords always and everywhere complete this form honestly?

Their vested interest is obvious, of course.

Oh you meant "corruption" by these landlords? I thought you meant by the officers. I think in the landlords' case it would be fraud, not corruption, no? technically? I'm not a lawyer though.

Anyway, the point is: too much tax-payers' money is being taken from us, and spent, on landlords. And pushing rents up, making tenants (us again! :angry: ) pay too much in rent as well.

[The Floating World]

TBH and afaics it doesn't make much difference whether they do the job fairly and correctly or not, it will still distort the market. Even if they exclude HB rentals, the shortage of private rentals will have a inflationary effect.

Excluding the obvious solution (more social housing, HB only available for SH), I would suggest the following:

• Include HB rentals in establishing local rents

• Set HB at <50%

AFAICS this will mean that, as the proportion of HB in a given area goes up, rents will go down for HB. At some point this will then push landlords into renting more to private tenants, which will have an upward pressure on HB allowances. In other words, with the right level of HB as a percentage of average rents, an equilibrium will be reached.

Bottom line is that as soon as a LL can get more money from HB than they could get renting the same property to a private tenants, then you know the system is screwed...

HB and LHA were already set at 50th percentile of market rents until this year, since April they have now gone down to 30th percentile. This means that 70 percent of privately rented properties in any area will already charge more than is available to any Housing Benefit claimant. Most properties are already out of reach of the average Housing Benefit claimant.

[tomandlu]

LHA rates are therefore set by what non-HB claimants agree to pay for rent.

It still distorts the market.

Look at it this way. You are a grocer with 10 cans of soup. 8 benefit customers have money to buy the soup given to them by the government. The amount they have is the average paid for by private customers. So, along come 5 private customers who would like to buy the last 2 cans of soup. Guess what happens to the price of those 2 cans... what is the outcome of this on the cost of the 8 cans of soup for the benefit customers?

Just because they exclude something from their calculations, it doesn't mean that it doesn't have an effect.

[Tired of Waiting]

As that article highlights, rental data is obtained from actual rental aggreements (...)

Are you sure? Double check the wording there. It is just a recommendation. Do you think that they always do that? Or even in the majority of case? Really?

You do; from this and other threads it's clear that you have little understanding of how Housing Benefit works or the implications of the government's cuts.

Please "enlighten" me then.

[leicestersq]

It's fine, as long as the form is them passed to the taxman for determining the amount of tax they should pay.

Any other way, and it would be open to fraud and corruption.

Can I have a guess as to whether these forms are cross checked with Inland Revenue?

I guess NO.

Can someone confirm or deny my guess?

[Si1]

The use of data from live Housing Benefit claims is not allowed so that Housing Benefit claims do not distort the market data.

that is the assumption, but of course arbitrage states that Housing Benefits claims WILL affect other rentals, by competition, so they will inevitable, only slightly indirectly, distort the market data