Local Housing Allowance (LHA) and Broad Rental Market Areas (BRMA)
Important Note: Changes were introduced to Local Housing Allowance on 1st April 2011. The information below sets out the current arrangements. Tenants whose claim started before 1st April 2011 should seek advice from their local authority housing benefit department.
- Local Housing Allowance
- How do I know which LHA rate applies?
- How is the LHA calculated for new claims?
- How is the LHA calculated for new claims from 1st April 2011?
- What is a Broad Rental Market Area (BRMA)?
- Why and how to contribute rental information to Rent Officers
Local Housing Allowance
Local Housing Allowance (LHA) is a flat rate allowance paid to housing benefit claimants. It is uprated annually, each April.
LHA applies to private sector tenants who make a new claim for housing benefit or those claiming housing benefit who change address. It also applies to tenants on housing benefit who move from the social sector into private sector accommodation.
Rent Officers determine 5 different LHA rates for the following categories of property: Shared accommodation (room in a shared property), 1 bedroom, 2 bedrooms, 3 bedrooms and 4 bedrooms.
How do I know which LHA rate applies?
The rate that applies depends on the size and make up of the claimant´s household, and the Broad Rental Market Area (BRMA) the rented property falls in. The LHA bedroom calculator can help you work out which LHA category applies to a household.
The LHA rates are updated annually each April. Your housing benefit will be based on the LHA rate which applies to you when you make a claim. You can find these on the LHADirect - Local Housing Allowances (LHA) webpage and from each local authority housing benefit department. They can also explain in detail how your Housing Benefit is worked out.
How is the LHA calculated for new claims?
Rent Officers determine the LHA for each category by calculating the 30th percentile of a list of rents within every Broad Rental Market Area (BRMA). The 30th percentile is a mathematical value which represents the level of rent where around 3 in 10 properties are let at or below LHA. Caps were applied to individual LHA categories, restricting the LHA in some areas, mainly central London.
The list of rents is a representative sample of private sector rents paid across the BRMA, including those from the lower end through to the upper ends of each rental market.
A graph showing the list of rents for each BRMA can be found on the LHADirect - Local Housing Allowances (LHA) webpage
The rental information is provided to Rent Officers by landlords, letting agents and tenants.
How LHA will be calculated beyond March 2013
The first annual update will come into effect in April 2013. The actual calculation will be made in advance in Autumn 2012. The April 2013 March 2014 LHAs will each be the:
- 30th percentile of market rents
or if lower
- current LHAs uprated by the September 2012 Consumer Price Index (CPI)
Where the CPI is a negative number or zero, the LHA will be the last determined rate.
The update in April 2014 will follow the same process.
What is a Broad Rental Market Area (BRMA)?
The BRMA is the geographical area used to determine the LHA rate. It is an area where a person could reasonably be expected to live taking into account access to facilities and services for the purposes of health, education, recreation, personal banking and shopping.
When determining BRMAs the Rent Officer takes account of the distance of travel, by public and private transport, to and from these facilities and services.
Rent Officers consult with local authorities when they determine and review the BRMAs. The boundaries of a BRMA do not have to match the boundaries of a local authority and BRMAs will often fall across more than one local authority area.
VOA Rent Officers provides the local authorities with information that identifies the BRMAs and which properties fall into them.
Maps and information for every BRMA can be found on LHA-Direct on DirectGov.
How we set BRMAs is explained in ‘Guidance to Rent Officers Determining BRMAs’. BRMAs are reviewed periodically.
Our Fact Sheet ‘BRMA Review Protocols’ explains the process in detail.
You may find our Fact Sheet ‘The Rent Officer and Local Housing Allowance’ useful.
Why and how to contribute rental information to Rent Officers
Rent Officers recognise that the private rented sector is complex. It is continually changing in response to local supply and demand, and national economic factors . Maintaining representative and up to date information depends on the ongoing co-operation and assistance of landlords, lettings agents and tenants.
All contributions towards this research are welcome and all we need are some basic details about the property let and the rent achieved.
Any rental information that agents, tenants and landlords contribute will be dealt with in the strictest of confidence and in accordance with the Data Protection Act.