Important: Changes affecting Housing Benefit for Private Tenants & Landlords

For people who live in private rented property the amount of Housing Benefit they get is limited to the level of average rents within a certain area.  These average rents are known as Local Reference Rents. The Benefits Division gets these Local Reference Rent figures from The Rent Service, an agency which is independent of the Council.  The Rent Service compares rents within a certain area, called a locality, and works out an average market rent for properties of a certain size.  Housing benefit is then calculated using this figure.  The Benefits Division is obliged to refer a person’s rent to The Rent Service annually so that Housing Benefit levels continue to represent average rent levels. This means that tenants may have a change to their benefit entitlement once the Rent Officer’s decision is a year old.

The Rent Service has recently undertaken a review of localities in preparation for a new scheme for private tenants starting in April 2008 called the Local Housing Allowance. This review has resulted in changes to the boundaries of the existing localities, which in turn affects the number of tenancies and the levels of rent that are analysed. This has had the effect of changing the average market rent figures for our district.  

Early indications show that in general, average market rent figures reported by The Rent Service have reduced. This means that levels of Housing Benefit for those people renting privately will also reduce.  This will affect both new claimants for Housing Benefit and existing claimants when their rent is referred to The Rent Service for the annual review. The average rent figure returned by The Rent Service on these annual review cases is in general lower than the figure from last year.  The Benefits Division is bound by the figures supplied by the Rent Service, which means that tenants already in receipt of Housing Benefit are at risk of it being reduced when their rent comes up for annual review.