Sector groups voice fears as Hunt cuts back energy bills help

Will Jeffwitz, head of policy at the National Housing Federation, said it is “absolutely vital” that people on the lowest incomes are supported after the universal package ends next April. 

He added: “We’ll await further details on the Treasury’s plans and will work with the government on how best to target support to people and organisations who need it most.”

Benefits decision

Pressure is growing on the government to increase benefits in line with inflation. Mr Hunt did not address this yesterday, but a decision is due. 

Mr Prestwich said action is needed to help vulnerable families. 

“We must stress that it is imperative that the government commits to fully uprating all benefits in April with the September Consumer Prices Index figure and that Local Housing Allowance rates are restored to the 30th percentile,” he said.

“Failing to do so would permanently cut income for households on benefits and push thousands more into poverty.

“Between April 2021 and March 2024 the number of people in absolute poverty is projected to rise by 2.9 million. If working-age benefits are not fully uprated, that will add another 600,000, half of which will be children.

“While we welcome the changes in today’s budget announcement, we remain concerned about the impact of government decisions on low-income households and cuts to public spending. We will continue to call on the government to provide the support needed.”

Stamp duty

Among the few measures that Mr Hunt retained from the Mini Budget was a permanent cut to stamp duty. 

Under the plans, announced by Mr Kwarteng last month, it means no stamp duty will be paid on the first £250,000 of a property – up from the previous threshold of £125,000. For first-time buyers, no stamp duty will have to be paid up to £425,000, compared to the former threshold of £300,000.

Richard Petty, head of JLL UK’s Living Advisory, welcomed this, saying it was “very necessary” given the withdrawal of Help to Buy.

“I know there will be different political views on cutting stamp duty but trying to encourage more people and helping more people onto the property ladder, particularly first-time buyers, is a very helpful step,” he said.

However, he added that the amount saved on stamp duty is “quickly swallowed” by additional mortgage costs.

Housing association finances 

Piers Williamson, chief executive of bond aggregator The Housing Finance Corporation, said that housing associations will “hit the pause button” while volatility in gilt yields is “almost unprecedented”.

He said housing associations will not look to raise funds until economic stability returns. 

“I think a combination of the economic environment and waiting for a new rent cap means all housing associations will hit the pause button while they wait for clarity,” Mr Williamson said.

“They need certainty to be able to produce sensible financial plans. At the minute most will be using stressed financial plans as their normal plan because of the asymmetrical exposure to inflation and their investment plans are thrown out of the window because interest rates have doubled.

“It’s a very different place to where we were in the summer. Most organisations that are sensible will wait for more certainty.

“To establish what the true levels are I think the market wants to see a holistic view of the UK economy and most people are hanging their hats on the OBR report.”