LHA is the allowance paid to housing benefit tenants in private rented accommodation. If private sector landlords reduce their rents they will be able to choose to receive Local Housing Allowance direct rather than relying on tenants to pass the payment on. This is one of several measures laid before Parliament in new Housing Benefit Regulations.
Welfare reform minister Lord Freud said: "We are looking for private landlords to respond to the need for lower rents and in return we are prepared to permit direct payments from the state."
"This incentive will bring an overall downward pressure on rents in the private sector. As these rents come down, more properties will become available to claimants and landlords will have certainty that their income will be protected."
New recipients of LHA will also have their allowances cut from next April. After this, the maximum paid to any LHA tenants anywhere in the country will be £400 a week for a four bed property. Furthermore, LHA will be calculated at 30% of local average rents rather than the current 50%.
The National Landlords Association noted: "Bringing forward the 30th percentile cut to April 2011 for new claimants will test how easily accessible rented housing will be for this group in need. The Government still needs to show how it will ensure that these tenants will be able to access at least the cheapest third of private rented properties and not be crowded out by other renters."