Tenants would be given greater financial freedom under proposed changes to the government’s local housing allowance (LHA) scheme.

Until now, the LHA was paid straight to the buy to let investor, a move that guaranteed rental costs were paid on time each month.

But under the new scheme, the allowance would be paid directly to the tenant in the hope it would give them greater flexibility to choose where they wanted to live.

Although the move had been welcomed by many, experts still offered a word of warning.

"This scheme is a significant change from the existing procedure and relies on the ability of individuals who are unused to managing rent payments to budget effectively,”Andy McQueen, managing director of Mortgage Works and UCB Home Loans, said.

But Stephen Timms, minister for employment and welfare reform, said the change was a win for LHA claimants and a step forward in allowing them to come off benefits.

“It will help people take action towards managing their own bank accounts, making it easier for them to move off benefits and in to work."