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Cuts to housing benefit are likely to leave many people struggling to pay their rent and forced to move to cheaper areas, a group of MPs has warned.
The House of Commons work and pensions committee says the government cutbacks in the benefit bill may be partly offset by increased demands on local authority resources.
It said the government should monitor the impact of the changes and be prepared to increase the £190m fund it has set aside to smooth the transition to the new system and help local authorities deal with possible increases in homelessness.
The group of cross-party MPs said it was not possible to predict how many landlords would respond to the benefit reductions by cutting rents, as ministers hope.
While some would do so, their response will vary in different parts of the country depending on local market conditions.
The MPs also expressed unease at plans to cut Housing Benefit by 10 per cent for those who have been out of work for a year.
The report recommended finding "a more nuanced approach", recognising the difference between disabled people and single parents who find it difficult to get into work and those who are simply not trying to find a job.
The committee launched an inquiry in July following announcements made by chancellor George Osborne in the emergency Budget.
The policy would see maximum weekly rates capped at £400 a week and payments reduced by linking them to the cheapest 30 per cent of properties in a neighbourhood, rather than the average rent.
In its report, the committee said it supported the government in its goal of managing the costs of Housing Benefit and agreed that support for the housing costs of low-income families should provide value for taxpayers' money.
Committee chair Anne Begg said: "It is difficult to judge at the moment to what extent Housing Benefit claimants will change their behaviour as a result of these proposals.
"The government hopes that people will be able to find cheaper accommodation in cheaper areas and that private landlords will be willing to reduce their rents to Local Housing Allowance claimants, so that the new levels will not result in an increase in homelessness."
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