Shocking revelation as Welfare Reform Minister accuses landlords of ‘milking the taxpayer’

Half of people renting private homes receive housing benefit, according to Welfare Reform Minister Lord Freud.

The astonishing figure was revealed as Lord Freud rejected claims that thousands of people will lose their homes after changes in housing benefit came into effect last month blaming private landlords for ‘milking the taxpayer’.

In his budget speech George Osbourne introduced maximum limits on housing benefit - £250 a week for a one-bedroom property to £400 a week for a four plus bedroom.

In October 2011 rents will be set at 30% of local reference rents instead of the current 50%. From April 2013 people on Job Seeker's Allowance will have to pay 10% of their rent from their Benefit.

The reforms are set to save taxpayers an estimated £150 million a year by making the more expensive properties available to housing benefit claimants no longer eligible.

It is believed that the benefit cap will affect around 13,000 households forcing families to move to a less expensive area or to negotiate a lower rent. In theory it could mean an end to the use of Housing Benefit tenants in private properties in areas like Chiswick which has prompted critics of the scheme to brand it ‘social cleansing’.

However, Lord Freud said that claims that landlords had been milking the taxpayer by inflating rents for those in receipt of housing benefit could be substantiated. He said that 1.46 million of the 3.6 million tenants in the private sector receive housing benefit to pay their rent, giving the Government massive influence on rent levels.

November 5, 2010