Why do the LHA rates change each month?
The Local Housing Allowance (LHA) rate for a given area is set on a monthly basis and published monthly by an area’s local council. There are several LHA rates for each council and these are categories by property style and property size. These LHA rates paid by the council fluctuate on a monthly basis.
Why do the housing benefit (LHA) rates change each month?
LHA was set up to give people in receipt of housing benefit a chance to rent a property from the private rental market. Before Local housing allowance was introduced in 2008, the amount of housing benefit paid to housing benefit clients wasn’t enough to afford the higher rents of private rental accommodation making private rental accommodation inaccessible.
LHA rates for each council are set by the Rent Service, a government agency. The Rent Service’s role is to continually monitor prices in the local rental market and update the LHA figures for each council in England and Wales every month to reflect increases and decreases in average rental prices.
LHA rates therefore change to allow tenants claiming housing benefit access to private rental housing by ensuring that LHA rates paid are ‘inline’ with current private accommodation rental prices.