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Social landlords will continue to receive housing benefit payments directly under the government’s new welfare reforms.

Housing associations had been concerned that they would see a rise in arrears if payments to cover rent went straight to tenants. They had warned that any rise in arrears would damage lender confidence in the sector.

Two weeks ago, welfare reform minister Lord Freud told a property conference that he did not support paying housing costs directly to landlords. But a spokeswoman for the department said today that officials had understood concerns around security of income for landlords and the bill would retain a ‘facility' for direct payments.

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