Nick Clegg warned  in December last year that annual increases in the amount of local housing allowance (LHA) paid to residential landlords will be capped at just 1% from 2014 to 2016, almost three times less than the current rate of inflation, last reported in November 2012 as being 2.7% (CPI).

The move will mean that the gap between current market rents being paid by working tenants and students in the private rental sector (PRS) and those paid to landlords with LHA tenants will continue to grow.

This news follows the current one-year nationwide freeze on LHA rates that started in March 2012 and will continue until March 2013. 'But hang on a minute' some landlords will already be crying (literally), 'these LHA rates have already been cut (drastically in some cases) over the past couple of years!'

For many landlords this is very true. And in this article we will look at around 20 of the biggest towns in England to find out which landlords have had to endure the biggest LHA cuts between March 2010 and March 2013. Rents have actually increased in some towns however, and the percentage swings in reductions and increases reveal vast regional differences. We will also compare LHA rates to PRS rates to see which towns landlords might want to consider switching back to working tenants, or vice versa, and for HMO landlords we will look at current room rates paid in both sectors. First of all, which cities have seen the largest reductions in LHA rates paid for a 2-bedroom flat?