Landlords can charge what they like. But there are Local Housing Allowance rates. These are used by local councils - the organisations who pay Housing Benefits - to set maximums for different styles of properties. (HB is, like the rest of the benefit system weirdly complex but at least LHAs mean someone can understand the maximum possible rent they might be entitled to.)
So a person wanting to claim housing benefits has to seek a property priced according to the LHA rates. Since this is a reasonable portion of the rental market people not claiming that benefit also have those cheaper properties available; or they can pay whatever they like for more expensive properties.
(People claiming HB used to be able to claim the actual LHA rate, and keep the difference between the LHA and the rent. Government thought this would encourage rent negotiation, by giving people claiming benefit a strong incentive to get cheaper rents. Sadly, HB is subject to massive amounts of fraud and so that system was subverted quickly by fraudsters.)
Sure benefits rates are set by the government but there's no corresponding measure to ensure the market will provide properties at that rate. The government has just cut 14-25% off the rates they'll pay with their "bedroom tax" policy, hoping that people will reallocate themselves to properties more efficiently. But after a year of the policy being in effect, 60% of people affected are in arrears with their rent, i.e. most people have just stayed put and hoped for the best.
Bedroom tax has been in force for people in private accommodation for many years. The new bedroom tax only affects people in public housing.
The bedroom tax is stupid. The aim is to make people move to smaller properties. People need money to move - you need to pay any existing rent arrears; any utility arrears; you then need a deposit and a month's rent advance for the new property (but I don't know how that works for public housing); and then you need vehicles to do the moving. Right at that point where the person needs more money they have some money taken off them.
Since the government likes "Nudge" they should have combined bedroom tax with a package that does all the logistics for moving and a single long term loan to cover some tightly controlled costs of moving. This would only be available to people who need to move in the next year or so after the introduction of the bedroom tax.
I haven't really looked at your poll, but:
> On average people think that 27 per cent of the welfare budget is claimed fraudulently, while the government's own figure is 0.7 per cent.
This says nothing about the amount of fraud in HB compared to other benefits. If there is near zero fraud in all benefits except HB it'd be fair to say that HB was riddled with fraud.
Rather than relying on a biased (nothing wrong with that, but a union using a YouGov poll is clearly using the poll to support their position) source using an online poll here are the actual figures: https://www.gov.uk/government/collections/housing-benefit-re...
> The total GB value of Housing Benefit (HB) overpayments outstanding at the
beginning of Q2 (2013/14) stood at over £1.3 billion; an increase of 10% on this point
the previous year.
£1.3bn per quarter is a substantial amount of money, even if it's a small percentage of total HB paid.
Note also that the amount of fraud present in HB has severe affects on people legitimately claiming HB: it makes ministers (who seem to ignore actual figures) want punitive HB regimes; it makes councils spend time and money on fraud detection which makes claiming HB unpleasant and lengthy; it increases the evidence burden for claimants which means that bank / building society statements are requested by councils which is pretty unpleasant and increases risks of data breaches.
Landlords can charge what they like. But there are Local Housing Allowance rates. These are used by local councils - the organisations who pay Housing Benefits - to set maximums for different styles of properties. (HB is, like the rest of the benefit system weirdly complex but at least LHAs mean someone can understand the maximum possible rent they might be entitled to.)
So a person wanting to claim housing benefits has to seek a property priced according to the LHA rates. Since this is a reasonable portion of the rental market people not claiming that benefit also have those cheaper properties available; or they can pay whatever they like for more expensive properties.
(People claiming HB used to be able to claim the actual LHA rate, and keep the difference between the LHA and the rent. Government thought this would encourage rent negotiation, by giving people claiming benefit a strong incentive to get cheaper rents. Sadly, HB is subject to massive amounts of fraud and so that system was subverted quickly by fraudsters.)
Example rates for Cheltenham, UK: http://www.cheltenham.gov.uk/downloads/file/3659/local_housi...
https://en.wikipedia.org/wiki/Local_Housing_Allowance#Bedroo...