Government cuts to local housing allowance (LHA) will leave many landlords with reduced rental income and could increase levels of homelessness, according to the National Landlords Association (NLA).

An NLA survey of LHA landlords has found that 90.3% of respondents would be less likely to take on a new LHA tenant if cuts are made and 49.6% of respondents said they could not reduce rent to retain an LHA tenant.

Over one million tenants receive housing benefits and the Department for Work and Pensions estimates that the impact of the proposed cuts will be an average reduction of £12 per week.

65.7% of respondents said they do not fully understand what LHA reforms will have on their letting business and 45.5% of respondents said they could cope with cuts to LHA if payments were made direct to landlords.

The government is proposing to cut the maximum LHA available from the 50th percentile to the lower 30th percentile of market rents.

A cap would also be introduced, based on the number of bedrooms in a rental property and future LHA increases would be linked to the Consumer Price Index.

David Salusbury, chairman of the NLA, said: “While we understand cuts need to be made to bring the burgeoning LHA budget under control