Landlords have been having trouble with the Housing Benefits for a very long time. When the announcement came from the government regarding the cut backs for housing benefits, the landlords were understandably upset. The long standing problems with waiting for payments and disputes around repayment when a tenant does not disclose his circumstances and entitlements have left landlords feeling that the housing benefit was simply not working. Over the last few years some of the changes have meant that the landlord was not receiving the payments directly, leaving the landlord in a very risky position with a greater potential for arrears.The original local housing allowance was meant to give the tenant encouragement to shop around for the best rental rate and allowing them to pocket £15 per week for the difference between the rent paid and the allowance. The government has now decided to scrap this idea as it appears not to be working.The changes that are being proposed will be in the elimination of the five bedroom category and the capping for a four bedroom at £400 a week. This will put an end to some current £2000 per week payouts in some parts of London. The top allowance for a one bedroom will be £250, for a two bedroom £290 and a three bedroom will be £340.Another change will be the end to the £15 weekly excess that certain customers were receiving. The government is also stating that from 2013 tenants who are out of work and have claimed Job Seeker’s Allowance for more than 12 months will have their housing benefit reduced by 10% in the hopes that this will give them incentive to do whatever necessary to get back to work.As with any transition it is expected to be problematic and this is why the government has agreed to increase its contribution to the local authority for discretionary housing payments. Current levels were previously at £20m a year which increased to £30m in 2011/12 and will increase again to £60m a year come 2012/13. Although this sounds excessive, in comparison the current cost of housing benefit is £20bn annually, which the government predicts would grow to about by 2015/16 if changes were not implemented.It was also announced that there would be an increased provision within the housing benefit for disabled people or tenants who had long term health problems that have a ‘proven need for overnight care’ – by way of inclusion of an additional bedroom to fit into the size criteria that is used to assess claims.The government is trying to equalize the system to make it fairer and a more sustainable Housing Benefit. It would eliminate the present situation where people receiving Housing Benefit are able to live in very expensive properties where most working people would not be able to afford. The new system would make it fairer for low income working families and for the taxpayer. The average housing allowance claimant will see a decrease of about £12 per week, however there are some who will see a decrease of significantly more.Not everyone is impressed by these proposals and there is no doubt that there will be a sharp increase in rent arrears and possibly homelessness. Large city centres such as London could have potential housing crisis just because the cuts will have more of an impact.Landlords will definitely have to take a closer look at their properties as well as the market they’re targeting, especially those who are targeting the Housing Benefit tenants. Only time will tell how much of an affect all of this will have on the housing industry.