Fears over housing benefit replacement may be unfounded

A new allowance being tested as a replacement for housing benefit has not caused the problems some campaigners feared, according to research published yesterday.

The Local Housing Allowance, which is being piloted in eighteen areas, has not caused greater arrears among tenants or increased homelessness, the Department of Work and Pensions evaluation reveals.

The allowance is paid directly to tenants and is based on the average cost of housing in an area, rather than the rent paid on a particular property as with housing benefit.

The three DWP studies, which evaluate the impact of the allowance on the first nine pathfinder areas, found tenants were increasingly choosing properties which were appropriate for their household circumstances.

And twice as many claimants had opened bank accounts to receive the allowance as equivalent housing benefit claimants.

The practice of publishing allowance rates has not had the feared effect of pushing up rents, the reports also found.

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