GLASGOW-based landlord Adrian Searle has helped low-income families rent a home of their own.

Now he fears changes to the way housing benefits are paid will make it impossible for him to continue to do so.

The changes will mean that benefits are no longer paid direct to landlords, but will go instead to the tenants themselves.

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"Landlords will always prefer working people. The one thing tenants on benefits had in their favour was that landlords were guaranteed a regular income," says Searle.

"Through the changes, introduced for laudable reasons, the numbers of people who will become homeless, or end up living in crowded properties, will doubtless increase. The exact opposite of the original intention, I'm sure," he said.

The benefit changes have sparked claims that Scottish taxpayers will have to foot a bill for up to £50 million a year in bad debts. Local authority umbrella group Cosla has predicted an inability to pay rents will rise fourfold when the reforms start to take hold, and described the scenario for cash-strapped councils as a "major problem".

Universal Credit will start to replace the current benefits from April and is expected to be fully phased in by October. Under the new system, most benefits, including Local Housing Allowance, will be rolled into one monthly payment.

In addition, direct payment of the allowance to landlords will stop, while the benefit amount paid to each household will be capped at £26,000 per year.

Councils and tenant organisations fear that, faced with a choice of buying food and other essentials and paying their rent, many tenants will delay or stop rent payments.

The change to the housing benefit system has been universally condemned by tenants and landlords alike, who fear it will plunge thousands of people who rent into debt.

Cosla has made what it calls a "not unrealistic" estimate that councils' allowances of around 3% for bad debts arising from rents would rise to 10% after the reforms.

Lord Freud, the minister for welfare reform, said that research by the Department for Work and Pensions (DWP) shows that the vast majority of tenants will make rental payments following the switch.

But the Scottish Federation of Housing Associations has warned that housing associations and co-operatives will face a huge financial burden through rent loss from increased arrears of at least £50m annually.

The majority of Scottish local authorities – 26 out of 32 – manage their own council housing stock. Around 60% of the rental income – or £615m – for these properties came directly from housing benefits in 2009-10 .

Cosla said: "We remain very concerned about this. Tenants should at the very least be given the choice of whether to pay the money direct [to landlords].

"Our president has written to ministers [to oppose it], but they are still going ahead with it.

"Councils are having to invest in staff and rental collection systems at a time when they can ill-afford it. Tenants who will be put under undue pressure are going to need a lot of support just to budget and pay their rent."

In a submission to the Government, Audit Scotland warned that there were "significant implications" for councils over the introduction of Universal Credit (UC).

It said: "They face challenges in communicating the position to claimants and in maintaining services and performance in a period of change. In addition, councils face reduced funding as the housing benefit caseload moves from council administration to UC and the likelihood of staff reductions."

Cosla has been working with the DWP in checking the support systems necessary for people living in social housing when they receive housing benefit directly. It says evidence from trial projects suggests that while most people are paying their rent, it has required a major staffing investment which would be "unsustainable in the longer term".

Harry McGuigan, Cosla spokesman on community wellbeing, said: "It is not too late for the Coalition Government to think again about this and they certainly should."

Pensioner Betty Stevenson, convener of the Edinburgh Tenants Federation, predicts that the government moves will be a "nightmare".

She said: "Giving tenants who are struggling at the moment a month's rent [and] council tax money in their hand is an enormous responsibility and many are going to be tempted to spend it on other things.

"Our fear is they turn to loan sharks which will put them further into debt. The housing debt at the moment is high; our worry is that it will go out of control and push rents up even further."

She added: "Tenants may find it very difficult to get bank accounts to pay by direct debit as the banks are so strict now."

Chris Norris, head of policy at the National Landlords Association, said his organisation supports some of the concepts behind the change in the benefit system, but added: "We are worried that it appears divorced from the realities of many tenants' lives and the impact that this will have on the supply of housing."

He said: "Private landlords play an essential role in providing good quality affordable housing for benefit recipients. However, if they do not have the confidence that rent will be paid to them, and cannot be certain of direct payments where necessary, many will conclude that it is simply too risky to continue letting to tenants on benefits.

"It's important to note that the Government insists that DWP's draft regulations do make provision for direct payments to landlords. However, with less than three months until the pilot goes live, we're unsatisfied that a clear mechanism for direct payments to landlords will be in place."

Organisations pressing for a mechanism to allow benefit payments to be switched back to landlords if tenants are in difficulties include Citizens Advice Scotland and the consultancy Policies for the National Housing Federation (PNFH).

A recent PNFH report said: "It will be important to respond rapidly to the evidence of distress to prevent the build-up of both a debt spiral and rental arrears."

Citizens Advice Scotland chief executive Margaret Lynch said: "If a family is already on a low income and struggling financially with rising costs, at least at the moment they are secure in knowledge the rent is getting paid.

"People are already having to choose between heating and eating, so if tenants receive their rent direct they may use it to pay for urgent bills and putting food on the table, hoping they can make it up. If they can't, of course arrears could build up, threatening the security of their housing tenancy and push them into a spiral of debt."