George Osborne recently announced new maximum Housing Benefits thresholds in the Emergency Budget which means that Local Housing Allowance (LHA) will have capped limits of £400 per week for properties with more than three bedrooms, £340 for a three bedroom property, £290 for a two bedroom property and £250 a week for a one bedroom apartment.

Alan Elborough, director of Settled Housing Solutions Consultancy Service, a service that assists local authorities to develop successful partnerships with the private rented sector, believes that the LHA restrictions will have an impact on front line housing and the private rented sector (PRS) partnership work which is already in operation.

Elborough said: “There may be issues that arise from the restrictions on LHA imposed in the Budget. These new limits will now make it very difficult for low-income families to access the private sector in areas where market rent values exceed the LHA cap. This is a particular issue affecting central London where an average two bedroom apartment is currently £480 per week.

“Authorities within the inner London area will therefore increasingly seek to re-house homeless families in outer London boroughs, impacting on housing and social services within these areas. In addition to the strain on services, all local authorities will now find it extremely difficult to procure PRS accommodation for use through their in-borough landlord assisted schemes.

“Assuming current claimants in receipt of LHA are not affected by the announcements in the budget, these households will still find themselves caught in a benefit trap as they may be reluctant to enter into employment if, in doing so, they will only be entitled to the restricted rate should they become unemployed in the future.”