The announcement comes as housing benefit regulations are laid in parliament today.
The government says it is taking necessary steps to manage housing benefit costs and are implementing all Local Authority Housing Allowance measures announced in the emergency Budget in June 2010.
For ne customers the cap will continue as planned to be introduced in April 2011 alongside the reduction in Local Housing Allowance to the 30th percentile, which has been brought forward from October 2011.
But existing customers will be exempt for up to nine months from the date their claim is reviewed by their local authority.
This will allow them time to adjust to any reduction in housing benefit entitlement and in practice means many existing customers will not be affected until after January 2012.
Ministers have also announced today a further £50m has been allocated over the Spending Review period to support these measures, such as helping local authorities to negotiate lower rents and helping those that do need to move.
In addition, from April 2011, claimants who meet the criteria will immediately become entitled to an additional bedroom space for a non residential carer.
Lord Freud, minister fro welfare reform, says: “We are looking to private landlords to respond to the need for lower rents and in return we are prepared to permit direct payments from the state.
“This incentive will bring an overall downward pressure on rents in the private sector. As these rents come down, more properties will become available to claimants and landlords will have certainty that their income will be protected.”
However, ministers are clear this is likely to be a temporary agreement to provide an incentive to landlords to lower their rents and is by no means a return to direct payments being made to landlords as a matter of course.