THE leader of Southend Council has called for a cap on how much landlords can charge tenants on benefits to stop London boroughs using the town as a dumping ground.

High rents in London boroughs, which exceed the £26,000 a year limit on benefits for families, introduced by the Government in 2013, have seen people who have become homeless given one-way tickets to Southend where rents are cheaper.

Ron Woodley, whose administration will learn its fate on Friday morning after Thursday’s elections, said he is in talks with the Government about allowing councils to cap private sector rents for those receiving housing benefit.

He said it would save the Government billions of pounds in housing benefit payments but, most importantly for Southend, stop London boroughs “dumping” homeless people with one-way train tickets to south Essex.

He said: “What I’m saying to the Government is they should be looking at the people living in the private rented sector subject to housing benefit and, over the lifetime of a parliament (five years) reduce rents down to that of social housing.

“It would save the Government something like £14billion 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.”

But Martin Ransom of Southend estate agents PACE, and himself a landlord, said reducing returns on landlords’ properties could discourage them from taking tenants on benefits at all and make the situation worse.

“Anything which reduces returns for landlords in regards tenants on housing benefit will only discourage landlords from taking on tenants on benefits – and it’s difficult enough as it is at the moment.

“It does depend on the rate, however. If you were to say to landlords they must take local people on housing benefit and not charge more than the local housing association rate, the gap between that and the market rate isn’t massive.

“But council accommodation is at a much more subsidised rate and, at that rate, it would discourage landlords from taking people on housing benefit.”

Judith Cordoran, chairman of the South Essex Association of Landlords, said the policy risked exacerbating the homeless crisis in Southend, but she said she was willing to discuss the proposals with Mr Woodley.

She said: “Landlords either take tenants on DSS or they don’t. We don’t, but if you think about the economics of a scheme like this, you will end up with only the very low quality, unrepaired houses that have belonged to landlords for 50 years, at the low price Mr Woodley is suggesting.

“I’m a huge supporter of his but we just need to have detailed conversations and he needs to come to the association meetings held at the council offices and understand from the people who attend those meetings the reality of the situation.”