The housing sector offers up its take on the Chancellor’s Budget yesterday in this round-up of industry responses
The Chancellor’s decision to scrap the two-child limit in yesterday’s Budget has gone down well with the housing sector, but it hasn’t granted Rachel Reeves a’ get-out-of-jail’ free card over the issue of poverty.
Industry responses point out that the move won’t be enough to tackle cost-of-living issues and child poverty in isolation from a host of other factors, including LHA rates and the overall cap on benefits a household receives – which could ‘claw back’ any gains made from ending the limit.
As Gavin Smart, chief executive of the Chartered Institute of Housing (CIH), pointed out, there’s plenty more to be addressed to ease the pressure on services and communities.
“[The] Budget takes welcome steps on the cost-of-living crisis, including ending the two-child limit. But without changes to the benefit cap, LHA, and long-term investment in supported housing and energy efficiency, too many people and services will continue to struggle.
“Affordable, good quality housing remains central to tackling poverty. We look forward to seeing the outcome on rent convergence early in the new year so that the social housing sector can plan with confidence and support with delivery of the government’s housing ambitions.”
Dan Bebbington, debt and energy manager at Housing Plus Group, said: “Scrapping the two-child limit for households claiming Universal Credit will help many families struggling with the cost of living. It will ensure children are no longer disadvantaged simply because of family size, and provide much-needed breathing space for parents managing tight budgets.
“However, Universal Credit will still be subject to the overall benefit cap, as Child Benefit counts as income. In some cases, this could mean families may see little or no financial gain from having additional children added to their claim.
“For households outside London, the maximum amount of benefits a family can receive is £1,835 per month – unless they meet the required work threshold or receive certain exempt benefits.”
Lee Bloomfield, chief executive of Bradford-based Manningham Housing Association, said: “As a housing association which places a special emphasis on providing high quality affordable properties for larger families, the removal of the two-child benefit cap is positive news which will help to lift a sizeable number of children out of poverty.
“That said, I am concerned that many more people on the lowest incomes will be dragged into paying income tax by the Chancellor choosing to extend the £12,570 personal allowance threshold until 2031.
“Added to ongoing high inflation and an ever-increasing cost of living, this could have a particularly damaging impact on working families in the years ahead.”
Catherine Ryder, chief executive of PlaceShapers, said: “Measures to ease the cost-of-living crisis, removing the two child benefit cap and initiatives aimed at strengthening employment prospects are all welcome steps that will help reduce the pressures that many households are facing. However, we remain concerned that the freeze to the Local Housing Allowance is pushing people in private rent into unnecessary hardship.”
Josie Parsons, chief executive of Local Space, said: “Scrapping the two-child limit is a welcome step that will ease pressure on many families, yet the wider picture for councils remains largely unchanged. Local authorities are still managing rising homelessness and higher temporary accommodation costs, but without the long-term funding certainty needed to plan realistic solutions. The Budget recognises the pressure in the system but provides no new settlement for housing or homelessness and local authority borrowing continues to rise.”
Tracy Harrison, chief executive of the Northern Housing Consortium (NHC), said: “The Chancellor spoke about her commitment to tackle child poverty but has not taken action on the Local Housing Allowance freeze. It is particularly problematic in the North with a higher-than-average number of people in the lowest income bracket living in the private rented sector.
“By keeping LHA at the same level while rents rise, the Government risks pushing more people, including children and families, into poverty. The continued freeze will increase the number of northerners facing arrears, eviction, homelessness and temporary accommodation.”
Converging issues
There was a general sense of disappointment that housing didn’t feature more in yesterday’s Budget, with key concerns raised around rent convergence, lack of investment in supported housing, and lack of detail on the government’s Warm Homes Plan.
Kate Henderson, chief executive of the National Housing Federation (NHF), said: “We had expected the government to announce how rent convergence, which equalises historical differences in rents over time, will be reintroduced. This policy is both fair for tenants and vital in ensuring the social housing sector has enough income to maintain existing homes and build new ones.
“However, this decision has now been delayed. We look forward to hearing the government’s decision on this in January, which will enable housing associations to put in strong bids for funding through the Social and Affordable Homes Programme and deliver on the government’s housebuilding ambitions.”
On other issues, she added: “It’s positive to see an additional £1.5bn to tackle fuel poverty through the Warm Homes Plan and we look forward to seeing the detail on this. However, it is disappointing not to see any funding announced for supported housing, with many schemes closing across the country due to years of cuts and rising costs.”
For NHC’s Harrison, the Budget was a “missed opportunity” for the clarity the sector needs on delivering the governments £39bn investment in social housing.
She added: “Social housing providers in the North are ready to step up to the challenge but are still waiting on critical details such as confirmation on the level of rent convergence, now delayed to January 2026, as well as the Warm Homes Plan, and final details of the Decent Homes Standard and Minimum Energy Efficiency Standards. All of this will impact how quickly the sector can build much-needed new homes.
“It is good news for the North that the government remains committed to devolution with further devolution of skills and growth funding and £1.3bn of the new National Housing Delivery Fund to be allocated to Mayoral Strategic Authorities. This will help make sure funding addresses local needs and will further boost local collaboration and partnership working.”
PlaceShapers’ Ryder added: “The broader emphasis on driving economic growth is vital. The sector stands ready to make the most of the new Social and Affordable Homes Programme to build new homes that will support this ambition and work with government to drive forward regeneration where it’s needed most. The reintroduction of rent convergence will further help housing associations to shore-up their plans to build new homes and invest in their existing homes and we look forward to seeing further detail on this soon.”
Jonathan Layzell, chief executive at Stonewater, said: “The Chancellor has rightly focused this Budget on tackling the cost of living. It is the necessary precursor to improving economic growth.
“So often that growth begins at home, and we need to build many more. The announcement of £48m for 350 new planners is a welcome step to unblock the system. Taken with the £39bn Social and Affordable Homes Programme announced earlier this year, the sector is well positioned to support the government’s target of 1.5m new homes.
“However, we would have liked to have seen the Warm Homes Plan published, as we know energy prices are one of the key factors impacting the cost of living for households across the country.
“We urge the government to prioritise publishing the Warm Homes Plan as soon as possible, and to provide a long-term funding commitment of at least 10 years. This stability is essential to unlock the supply chain investment needed for a sustainable, large-scale retrofit programme – one that cuts energy bills and eases pressure on the NHS by preventing illnesses caused by poor-quality homes.”
Social impact
Andy Hulme, chief executive of The Hyde Group, said: “Last week, we published research highlighting that England’s 4.3m social homes provided at least £87bn last year of benefits to the economy, including £18.5bn in savings to the NHS.
“Ahead of the decision on rent convergence in January, we will keep making the case for the value that social housing unlocks for society and the economy to underline the need to make social housing more financially sustainable as the government seeks to build 180,000 social rent homes over the next decade.
“Successive caps and cuts have reduced rents for social homes by 15% over the past decade, at a time when investment needs have grown and social landlords are spending record sums on repairs and maintenance. We would have been able to invest more per year in our customers’ homes and services if the standard rent formula had been maintained since 2016.
“The current absence of rent convergence means that rents at around half (45%) of the social homes we provide are below where they should be.
“We will continue to engage with government to advocate for rent convergence to be reintroduced at £3 a week to provide further resources over the next decade to invest in customers’ homes and to help build new affordable homes.”
Paul Dolan, chief executive of Riverside, said: “We are pleased to see the financial boost for the Warm Homes Plan, which will create warmer, energy efficient homes and improve the health and wellbeing of residents. Riverside has been able to deliver energy efficiency improvements to thousands of homes across the country, and we’re keen to continue this work with government.
“However, we are disappointed that no funding for supported housing has been announced. We are deeply concerned about the perilous state of supported housing and homeless prevention services such as floating support.
“Last year, one in three supported housing providers had to close schemes because of funding pressures. We are now awaiting the government’s long-term homelessness strategy, and we hope that long-term ring-fenced funding for supported housing is forthcoming to prevent future closures”.
Phil Andrew, Orbit Group’s chief executive, said: “Given the positive housing measures announced in the Spending Review, it came as no surprise that today’s budget focused on driving other areas of economic growth. However, we remain confident in the government’s continued commitment to tackling the UK’s housing crisis.
“Whilst it’s a positive sign that the OBR predicts that net additions will rise sharply in 2029-30, it’s also a firm reminder that making an impactful difference will take perseverance and time. We must continue to work together to deliver much-needed homes over the long term. At Orbit, we remain committed to playing our part, having recently increased our new build and regeneration commitment to 7,000 homes by 2030, an increase of over 20%.”
Graeme Anderson, chief executive of Bromsgrove District Housing Trust (BDHT), said: “The continued commitment to the £39bn Social and Affordable Homes Programme, despite the recent reshuffles, provides more positive outcomes for low-income families, of which we see many in Bromsgrove, by increasing the availability of affordable homes.
“The Chancellor’s decision to scrap the two-child benefit cap in full will also ease pressures on families. According to data provided by the End Child Poverty Coalition, this will lift approximately 250,000 children out of poverty and mean 850,000 are in less deep poverty, resulting in a transformational impact on households in our town and across the country.
“The lack of clarity on rent convergence at this stage is disappointing, but we are pleased by the news of £3.4bn over the next three years from the Warm Homes Plan. For organisations like ours, this investment will help us maintain affordability for tenants while continuing to protect the long-term sustainability of our homes.
“However, significant investment means nothing if there continues to be a bottleneck in the delivery of homes. That’s why the announcement of £48m for 350 new planners within the wider planning reform is another important move. We hope this will result in greater pace, allowing projects to move from concept to construction more quickly.”
Image credit: Kirsty O’Connor / Treasury
Read next: Thinking through the future
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