Private tenants who get the local authority to pay the rent so they can afford to live in attractive locations may see this perk sharply curtailed.

Chancellor George Osborne has placed limits on the amount payable under the Local Housing Allowance (LHA) to tenants at £250 a week for a one-bedroom flat and £400 for a four-bedroom family house.

David Lawrenson, a landlord and property investor who produces website LettingFocus.com, said: "The new limits will mean landlords who previously let to LHA tenants (because it paid rather well for those landlords who knew what they were doing and could work their way around all the hideous forms) will no longer be so happy to do so.

"Instead, they will look for tenants able to pay higher rents without needing local authority support."

Mr Lawrenson says the new limits will be most significant in London and the South East, where rents are higher.

Here LHA recipients could be pushed out of more expensive homes into areas where they can still find a vacant home available within the new limits.

Mr Lawrenson thinks the crackdown could trigger strongly contrasting reactions among the public.

Some will be pleased to see large families no longer allowed to rent expensive homes in prime areas at the taxpayers' expense.

Others, said Mr Lawrenson, might see the new crackdown as "ghetto-isation".

There is also the question of what happens to existing tenants already claiming LHA to live in homes where the rentals already exceed the new limits - will they have to move out when rental agreements come up for renewal, or does the new measure apply only to new lettings?