London Councils, the body which represents all local boroughs in the capital, says introducing a tax break would encourage property owners to rent to benefit claimants and “avert a homelessness crisis.”
The organisation says welfare reforms mean fewer privately-rented properties are available to local councils looking to house families.
It also warns that landlords are withdrawing from the temporary accommodation market due to local housing allowance rates being significantly lower than market rents for most of London.
London Councils’ Executive Member for Housing, Mayor Sir Steve Bullock, said: “All boroughs are working hard to increase the supply of temporary accommodation but this is proving very difficult. Boroughs are expecting a continuing reduction in supply of private rented homes and increased levels of homelessness.
“These two factors are driving an urgent need to find alternatives to the current model, such as considering tax relief for landlords renting in the social housing sector.”