Page last updated at 14:18 GMT, Thursday, 22 October 2009 15:18 UK

Tories urge tenant benefit change

Housing estate in Derbyshire
The Tories would allow tenants to choose how the allowance is paid

Automatic direct payments of housing benefits to private tenants in England should be stopped, the Tories say.

The party says the government, which is to undertake a review, should follow its lead and change the policy.

The move comes after housing charities and landlords said changes in 2008 have meant some tenants are finding it hard to manage or are dodging rents.

Some landlords, who were previously paid directly, are said to have stopped renting to low income households.

In what it called a "radical reform" last year, the government replaced housing benefit with a local housing allowance for most new tenants in the private rented sector in England.

'Bad for everyone'

Under the old system, housing benefit could be paid directly to the landlord but in most cases, payments now go to the tenants. They are then expected to pass the rent money on themselves.

The change was meant to encourage greater financial responsibility but the housing charity Shelter say some claimants are finding it difficult to cope.

In a survey of 450 tenants, they reported a quarter of them said they had fallen into arrears.

Meanwhile, the National Landlords Association say many of its members are discouraged from renting to anyone on benefits.

The Conservatives want to allow tenants to choose whether to have benefits paid directly to the landlord or maintain responsibility for passing on rent payments themselves.

At the national conference for homeless charity Crisis, shadow housing minister Grant Shapps said: "Fearful that rent money may never be paid, some landlords routinely include the words NO HB in their ads, further restricting the supply of housing for affordable rent.

"At the same time some of the most chaotic tenants have struggled to manage their finances, meaning that the cash is already spent by rent pay day.

"It strikes me that the current situation is bad for everyone and I can see no reason why people on Local Housing Allowance shouldn't enjoy the freedom to have their Housing Benefit paid direct to their landlord. Our proposal will destigmatise the system and increase the amount of affordable homes available."

The government say the new system is fairer and simpler than the one it replaced but are beginning a review of the system later in the year.

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