Renting to LHA tenants: A landlord’s guide

Renting to tenants who receive Local Housing Allowance (LHA) can have lots of benefits, but can understandably come with a few concerns. Here’s what you need to know before renting to tenants who receive benefits

What is an LHA tenant?

• LHA (Local Housing Allowance): Sets the amount private renters can receive in housing benefits.
• DSS (Department of Social Security): An outdated term, sometimes still used to describe tenants who receive benefits. The correct terms are Housing Benefit (HB) or Universal Credit (UC).

Important: Not all tenants who claim benefits rely on them entirely. Many people working full time now rely on benefits of some form, so it’s important not to make sweeping generalisations.

Can landlords refuse LHA tenants?

Blanket bans are unlawful. Refusing all LHA tenants may count as indirect discrimination under the Equality Act 2010. While income and employment status are not protected characteristics under the act, women and disabled individuals are more likely to receive benefits, and therefore may be disproportionately affected.

Under the Renters' Rights Act, letting practices are subject to greater scrutiny. Landlords in England must avoid discriminatory policies or risk civil penalties of up to £7,000 if they breach the rules. Landlords will have the right to appeal to the First-tier tribunal. Tenants and prospective tenants can report issues to their local council or take legal action through the courts, and may also seek redress via the new Private Rented Sector Ombudsman or relevant letting agent redress schemes.

However, case-by-case checks are allowed. You can still assess a tenant’s financial stability, e.g. credit checks, references, and affordability assessments.

The Renters’ Rights Act applies to England, but these new rental discrimination laws will be extended to Wales and Scotland. 

FAQs

Q: Can LHA payments go directly to landlords?

A: Normally, payments go to tenants. However, landlords can apply for direct payments if the tenant is vulnerable or at risk of homelessness due to arrears.

Q: Are landlords liable for overpayments?

A: No. Overpayments are usually recovered from the claimant, not the landlord.

Final considerations under the Renters Rights' Act

With Section 21 abolished, landlords in England must rely on statutory possession grounds if issues arise. This means:

• Affordability checks are critical
• Clear documentation and good communication is essential
• Discriminatory letting practices can trigger enforcement or ombudsman complaints