The Chancellor has reduced the taper rate of Universal Credit, meaning the amount withdrawn from every pound someone earns will be cut from 63p to 55p.
The change will take effect by December, though October’s £20 cut in Universal Credit payments hasn’t been reversed.
Ben Beadle, chief executive of the National Residential Landlords Association, said: “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.
“However 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.”
Polly Neate, chief executive of Shelter, said: “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. With no plan and no new money to build enough truly affordable social homes, thousands of families will remain caught in a relentless struggle to keep a roof over their heads.
“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.”
Another announcement is the government will bring in exemptions to the Shared Accommodation Rate, which limits housing benefit support for single people under 35 to a room in a shared house, for victims of domestic abuse or modern slavery, from October 2022 to October 2023.
Vulnerable tenants will be able to claim the higher 1-bedroom self-contained Local Housing Allowance rate.