News Desk

The coalition Government's plans to reduce Housing Benefit will lead to poor families being housed in the suburbs of London, with the rich living in central London, according to a civil servant who spoke with The Guardian.

According to the report in The Guardian the benefits of "workless families" will be capped at £500 per week from 2013, financed in part in a reduction in housing benefit to 50,000 families.

Under new laws passed in the emergency budget in June, the Local Housing Allowance (LHA) will be capped at 30% of local rent levels, with a saving of £3.9 billion, but would result in 250,000 people being put at risk of losing their homes.

60% of landlords according to research by London local councils would not lower, or entertain receiving lower rents, from tenants due to the reduction of LHA payments.