A claim by the prime minister that private rents are falling as a result of welfare reforms was wrong, research by Inside Housing shows today.

Mr Cameron told parliament on 11 January that ‘rent levels have come down, so we have stopped ripping off the taxpayer’. Number 10 later said private landlords were reducing rents – lessening the impact of benefit cuts – in return for local housing allowance being paid directly to them.

But an Inside Housing survey using freedom of information requests of every English council shows Mr Cameron’s claim does not stack up. Of 204 authorities to respond, just 36 reported any rent reductions in return for direct payment of LHA.

Of those 36, the numbers of landlords in each council area to have reduced rents are miniscule. Twelve of the councils reported a combined total of 65 landlords reducing rents – an average of fewer than six each.

Jack Dromey, Labour’s shadow housing minister, will raise the matter in parliament demanding that Mr Cameron corrects his statement or justifies it.

He has already written to number 10 about the issue but received no response. Mr Dromey said: ‘Now we know the truth. The nationwide Inside Housing story exposes the reality of rising rents in most areas of the country and explodes the myth that rents are falling.’

A survey by estate agency LSL Property Services, cited previously by housing minister Grant Shapps as grounds for the claim, shows rents in December increased by 4 per cent year-on-year – despite a monthly drop.

The National Landlords Association and the Residential Landlords Association have each disputed the claim rents are falling and believe landlords are more likely to reduce the number of tenancies let to benefit recipients.

Since April 2011 new LHA ‘safeguards’ have allowed private landlords to receive benefit direct where the council ‘considers it will assist the customer in retaining a tenancy’ and the rent is ‘affordable to the tenant’.

The DWP said it is aware anecdotally of around 80 councils that have used the new safeguard and that the majority will use it to negotiate down rents in 2012 as LHA caps for existing claimants are phased in.

Number 10 declined to comment.