Chancellor Rishi Sunak has cut the amount the government claws back from workers who receive Universal Credit (UC) top-ups from 63p to 55p for every £1 they earn but also confirmed £5 billion in funding to help bail out more property owners hit by the cladding scandal.

The new UC announcement, together with a £500 increase in work allowances, means Sunak is supporting many of the lowest-paid families with a £2 billion scheme worth £1,000 a year on average to the poorest UC claimants who have their pay topped up by the state.

“This is a two billion pound tax cut for the lowest-paid workers in our country, supports their costs of living and rewards work,” he told MPs.

Sunak said it would affect some two million families, the majority of whom will be renters, and come into effect at the beginning of December at the latest.

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He gave two examples. This included that a single mother earning the national minimum wage and renting her home would be better off by £1,200 a year, while a couple with two children renting their home would be better off by £1,800 a year.

NRLA reaction

The NRLA has welcomed the Chancellor’s announcement but its Chief Executive Ben Beadle has warned that the measure does not make up for other benefit cuts brought in by the government.

“Today’s announcement is welcome news for those private tenants who have struggled to afford their rents throughout the pandemic, despite private rents falling in real terms,” he says.

“But it does not undo the damage that previous decisions to freeze housing benefit rates in cash terms will cause.

“It is simply bizarre to have a system in which support for housing costs will no longer track market rents. The Chancellor needs to undo this unjust policy as matter of urgency.”

Lighten the load

Polly Neate, chief executive of Shelter (pictured, below), says: “Housing costs are almost every family’s biggest outgoing and their biggest worry but there was very little in the Chancellor’s budget to lighten that load. 

polly shelter

“While lowering the taper rate to allow people in work to keep hold of a bit more Universal Credit is really good, it won’t reach all of the five million families hit by the recent UC cut, and it doesn’t help people unable to work because they are sick, disabled or have young children to look after.  

“The government cannot level up this country if it keeps missing opportunities to sort out the housing crisis. Until it commits to building 90,000 green social homes a year, families are going to continue to face the agonising choice of whether to put food on the table or pay the rent.”  

Read more about Universal Credit.

Cladding costs

Sunak’s budget speech offered slim picking for landlords overall unless, that is, they own apartments within tower blocks affected by the cladding scandal.

The Chancellor confirmed the government’s £5 billion to fund more relief for those facing financial difficulties following the Grenfell tragedy – many of whom are landlords.

bowring planet rent

Mary-Anne Bowring (pictured), MD of property management firm the Ringley Group, says: “A blanket tax on developers is fairer than leaving leaseholders to shoulder the burden but it is still a blunt instrument to use to fix the cladding crisis.

“Fundamentally, accountability should fall squarely on those who overlooked the potential hazards of unsafe cladding in the first place.”

Estate agent Jeremy Leaf (pictured) adds: “The £5 billion fund is a step in the right direction but nowhere near the sums mentioned as being realistic to resolve the problem.

“A proper assessment of what’s involved is required, as well as enough tools to do the job in terms of engineers and surveyors and robust checking.

“Why should anyone be stuck in something un-mortgageable, particularly those blocks with very limited amounts of cladding? They have been tarred with the same brush as those blocks with extensive issues.”

8 COMMENTS

  1. If the government is serious about protecting the environment and minimising emissions, it should be cutting housebuilding and incentivising house sharing, especially houses on greenfield sites. The only new houses should be those replacing those unfit for occupation. Fewer houses with more people in them would be more efficient in terms of financial and carbon costs, as well as energy costs.

    • We already have some of the smallest houses in the Western World along with most young adults only able to afford shared housing. How ridiculous to suggest that we and our children should not have our own homes!

  2. On ‘Cladding costs’ this £5 billion help is just recycled news / P.R. exercise. That has been known for some time. Government need to get their act together and take decisive action to end this cladding scandal. Lots of leaseholders are not getting any help and are being asked to pick up the bill themselves, leading to financial ruin.

  3. The cladding issue is going to run for many years. Not the news people want to hear, but realistically that’s how it’s going to pan out. I see the future being something like this …

    Leaseholders sue the freeholder for selling them something which it’s now turned out isn’t what it was claimed. At the same time, the leaseholders will be threatening to terminate the leases of any leaseholder refusing to pay their share of the current costs for remediation.

    The freeholders will in turn sue the developer who built it for building something that wasn’t safe. Of course, many o the developers won’t be around any more – one reason (of several) for setting up a new company for each development ! Hopefully there’ll be some insurer to claim against since the claim will relate to events happening while the developer would have had some insurance.

    The developers sue … not sure now, possibly the architects who specified the cladding. Again, they might not exist any more – but they should have had public liability insurance so the insurer will be on the hook.

    And they sue the manufacturers for falsifying the fire safety claims.

    At each turn, there will be lengthy legal arguments, and insurers chipping in to try and shift the blame (and hence claim) onto someone else.
    And all these claims, counterclaims, appeals, etc, etc will take a lot of years.

    And in the meantime … it’s going to remain a right mess, with some very hefty bills to be paid by someone. If I were an affected resident, I’d be tempted to get together with some of the others, borrow the window cleaner’s basket, and take the damned stuff off ourselves !

    • In my opinion, the cladding issue is the Council’s Building Regulations problem, fair and square. Without their say so, no building anywhere could not go ahead. So they are the ones that should carry the can. Beryl

  4. Polly Neate should understand people with young children is their responsibility not ours, we had to rear our families at our own expense, it not for tax payers to rear other peoples children, other wise we might all as well stay in bed and keep making them.
    Why are there 5 million on universal credit get them off it, if it wasn’t there they would work in the main, 3 million on housing benefits, they stay on it for life, why buy the cow when the milk is free.

    • Yep living a comfortable feckless work free lifestyle is perfectly possible.

      Work simply doesn’t pay.

      There are about 1.2 million jobs out there.

      The welfare scroungers should be conscripted to do those jobs unless they manage in the meantime to source their own employment.

      The DWP accept scrap metal collecting and selling the Big Issue rag as a valid jobs.

      You could have 1.2 million Big Issue sellers.

      All do 16hrs work pw and that avoids any real work and the OBC.

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