Allowing private landlords to validate local housing allowance claims can help councils simplify their procedures and cut their housing waiting lists. Neil Merrick heads to Derbyshire to find out how
Most weeks, private landlord and letting agent Richard Jones receives four or five enquiries from would-be tenants eligible for housing benefit.
While other private landlords can be reluctant to let homes to benefit claimants in case there are delays in local authorities processing the claim, Mr Jones is happy to accept tenants whose rent will be paid in the form of local housing allowance.
Then again, unlike other landlords, he is not relying solely on councils to deal with the paperwork - he looks after most of it himself.
Mr Jones, owner of Ilkestonproperty.com, has been validating claims for Erewash Council in Derbyshire since 2010 and, towards the end of last year, began doing the same for nearby Amber Valley.
By allowing Mr Jones and his staff to validate claims on their behalf, Erewash and Amber Valley trust him to check claimants’ ID, proof of income, along with any benefits or tax credits they receive.
But why would a landlord want this responsibility, why would a local authority hand it over to them, and how does the process work?
Mr Jones, who owns 50 homes in the Ilkeston area of Derbyshire and manages a further 300 in the county and neighbouring Nottinghamshire, is thought to be the only private landlord in the UK to validate LHA claims.
He came up with the idea of doing so after getting frustrated at how long it took local authorities to authorise the paperwork, especially when tenants would turn up at his office with it all in-hand.
As he was in regular contact with Erewash Council, he asked whether he could validate the claims himself.
Now it takes Mr Jones or one of his employees about 15 minutes to check everything is in order. Tenants sign a permission mandate before he validates their claim and puts the council’s stamp on the relevant form. It is then scanned to the local authority and usually turned around within 24 hours. This compares with an average of 17.5 days taken by Erewash when claimants are required to take their documents to the council’s offices.
One of the key reasons LHA claims are delayed elsewhere, says Mr Jones, is that landlords submit incomplete forms to housing benefit departments. ‘The council has to send out for identification or other evidence, which can be time-consuming,’ he says.
About 40 per cent of tenants living in homes let by Mr Jones receive LHA, which is paid directly to them. It only took half a day for him and his staff to be trained by Erewash Council on how to validate claims. ‘A lot of the information we want to collect for references is the same as the council wants for a LHA claim,’ says Mr Jones, who has been a private landlord for more than 20 years and a letting agent since 2009. During the couple of years he’s been validating claims, he can only recall one or two instances where someone tried to commit fraud.
Up until 10 years ago, all housing benefit claims were verified by local authorities, regardless of whether a claimant was renting from the council or another landlord. After the rules were relaxed, some local authorities invited housing associations to verify claims.
While there is nothing in law to prevent a council from asking landlords to validate housing benefit claims, local authorities are still responsible for processing the claim. They should ensure that landlords validating claims on their behalf do not breach data protection rules and acquire permission mandates from tenants before asking them for documents, says Jo Till, a solicitor at Trowers & Hamlims. ‘Everything must be done in an above-board way,’ she adds.
Mark Rodgers, a legal consultant on housing benefit and supported housing, states: ‘The bottom line is that the local authority has to be certain that the information it is provided with is satisfactory for it to process the claim.’
For Erewash Council, the decision to train Mr Jones and his staff to validate claims was part of efforts to make things easier for tenants, especially those with low levels of literacy, says Philip Sudlow, its housing benefit manager. ‘It provides another outlet for people, rather than them going to the council,’ he says. ‘It helps if they have a one-to-one relationship with their landlord.’
At the end of February, 7,634 households in Erewash received housing benefit or, in the case of those renting privately, LHA. Mr Sudlow estimates that 15 to 20 per cent of claims made in the area are validated by landlords, including four housing associations. ‘They [landlords] say how successful they find it to do housing benefit claims at the same time as they take on a tenancy,’ he says.
The council also deals with up to 200 private landlords, but Mr Sudlow says it ‘has to be careful’ about which it permits to validate claims. ‘We’ve worked closely with Richard [Jones] for a number of years. There are others I would consider opening it up to, but I wouldn’t open it up to all [private] landlords,’ he adds.
The council, he explains, would only be interested in training those that have a substantial number of properties and a ‘reasonably high’ turnover of tenants that claim LHA. If necessary, the local authority can double-check the benefits that a claimant receives via the Department for Work and Pensions’ national database.
Sam Lister, policy and practice officer at the Chartered Institute of Housing, says more private landlords may be encouraged to let homes to benefit claimants if they play a role in the process. ‘They will have greater confidence [in the system] if they see the documents that the claimant has,’ he says.
Vincenzo Rampulla, public affairs officer at the National Landlords Association, says other private landlords might be interested in validating LHA claims, depending on workload. ‘If local authorities make it easy for others to verify [information], it could be an advantage in cutting waiting lists and streamlining processes.’
In Northampton, the local authority has found that fewer lettings agents are interested in housing benefit claimants because LHA rates are falling, meaning claimants are increasingly unable to afford the rents they want to set.
Northampton Council already allows six housing associations, a charity that runs a night shelter for homeless people and a private lettings agent to validate claims.
But rather than training individual private landlords to validate claims, the local authority is trying to improve its in-house validation systems so that tenants renting within the private rented sector see their documentation dealt with faster.
‘Landlords want speed and assurance,’ says Ian Swift, Northampton Council’s housing solutions manager. ‘The best thing to do is to get somebody trained up so that we can fast-track the claims.’
Sue Ramsden, policy leader at the National Housing Federation, points out that all of these arrangements could change following next year’s introduction of universal credit, when all claims will be processed nationally and tenants will be paid most benefits directly.
But, she adds: ‘The government wants to reduce spending on administration and cut fraud. If you take the local authority out of the administration, the only organisation with a local presence is the landlord.’
The NLA’s Mr Rampulla acknowledges that whichever organisation validates claims is also in part responsible for reducing benefit fraud,
but adds: ‘If a landlord has many properties and a lot of people claiming LHA, it could allow local authorities to use the private rented sector more efficiently.’
To validate a housing benefit/local housing allowance claim, claimants are required to produce:
- Two forms of identification
- Evidence of earnings, including self-employment
- Details of benefits and tax credits received
- Details of other income, such as a pension
- National insurance number
- Bank details
- Information about savings and investments