A local politician claims to be in talks with the Government about introducing rent caps when landlords let to tenants on benefit.
The leader of Southend Council says his town is being used as a “dumping ground” by London borough councils.
With Local Housing Allowance, and now the housing allowance element within Universal Credit, local authorities in affluent areas struggle to find affordable private rented accommodation for homeless people.
Ron Woodley, an independent councillor, said that London boroughs are shipping people out are given one-way tickets to Southend where rents are cheaper.
In a number of London boroughs market rents are far higher than the LHA maximum cap of £26,000.
Woodley said private rents charged to tenants on benefits should be reduced to those charged in social housing.
He said: “It would save the Government something like £14bn a year in housing benefit and would make housing in cities like London more affordable, so you’d stop the London boroughs sending people out of London because it’s cheaper elsewhere.
“In many European countries they have some sort of cap on what people can charge in rented accommodation and I think we need this to stop the private rented sector running out of control, which is what it’s currently doing.”
However, Richard Hair of Hair & Son estate agents in Southend warned about the dangers of interfering in the market place.
He said: “The Government has an appalling record of interfering in the property market and there have been suggestions not long ago by the Labour Party of capping rent.
“Anyone interfering in any market place does so at considerable risk to the market place.”
In the Southend Echo article, Martin Ransom of Pace estate agents in Southend, warned that reducing returns for landlords could discourage them from taking on any tenants on housing benefits at all.