Fears housing benefit changes could mean less homes being built in boroughs like Newham

Plans to pay housing benefits directly to tenants could damage the building of new affordable housing in councils such as Newham and Tower Hamlets.

That is according to London Assembly members who last week called on London Mayor Boris Johnson to launch an urgent review of the potential impact of changing the way housing benefits are paid.

Labour’s London Assembly member Fiona Twycross, who proposed the motion, said: “These proposals are an object lesson in poorly designed reform and promise to create the perfect storm of unintended consequences.

“All the evidence suggests that when housing benefit is paid directly to tenants, more people get into arrears and that means housing association losing out on the cash they need to build more affordable homes.”

Assembly members backed a motion urging the Mr Johnson to press the government for assurances that the introduction of the new Universal Credit – whereby rent would be paid to tenants instead of directly to landlords – would not exacerbate London’s housing crisis.

There are currently around 24,000 people on the housing waiting list in Newham.