Your analysis is correct and I fully agree.
By the way I don't think that the caps being proposed by the coalition will produce 80K + homeless households. I have said on here at another post that I question the survey that produced that conclusion (small sample size, bias of respondents). In a nutshell I don't think anything like that volume of private landlords will quit letting to HB tenants.
That said, the caps proposed will have an impact in Westminster and some parts of other boroughs where some private landlords will withdraw - much less than 80K but hard to say without some good research exactly how much it will be.
My point was a more of a general one - that harsh rent controls on say all private sector rentals - HB and non HB - would have serious issues for supply.
Actually another issue for private landlords letting to HB tenants is that actually they prefer HB tenants who are permanently on HB because it is the going into and coming out of work that b****s up the payments made under LHA.
So, not exactly in line with the Back to Work ideals of the Conservatives, is it?
Clearly, what govt needs to do is sort out the system of HB payments so private landlords are not put off letting to those people at the lower income levels who are likely to be in and out of work (and hence coming on and off HB)
As an expert in the PRS, the way the interface with the private rented sector from local govt works irritates me because there is so much more that could be done to improve this end of the housing system but I'm afraid many in the govt and local govt just don't "get it"
Now we will have a situation where expensive boroughs will be spending resources trying to recruit private landlord supply in cheaper boroughs while the cheaper boroughs spend cash trying to defend their turf.
What a waste of taxpayers money but when I pointed this out to central govt they said they were happy with local boroughs making local arrangements.