Today, Chancellor Rishi Sunak unveiled his spending plans in a Budget he said would “prepare the country for a post-Covid age of optimism”. He noted the Government have been more successful in preventing the long-term economic damage of Covid and said unemployment is expected to peak at 5.2% – meaning over two million fewer people are out of work than previously feared.
There had already been big announcements on the rise in the National Living Wage next year to £9.50 an hour and public sector pay rises, but a surprise announcement was that the Universal Credit Taper Rate (which withdraws support gradually as people work more hours) will be cut by 8%, from 63p to 55p.
Despite these positive announcement, he outlined the challenges facing the economy, including inflation and rising energy prices. The Chancellor said inflation is likely to hit 4% and acknowledged cost of living concerns.
- The Universal Credit Taper Rate (which withdraws support gradually as people work more hours) will be cut by 8%, from 63p to 55p. As a result, nearly 2m families will keep on average, an extra £1,000 a year.
- Work Allowances will be increased by £500 – a tax cut next year of £2.2bn.
- Normally, this change would be brought in in April next year, but the Chancellor said it will be introduced within weeks – by 1 December at the latest.
- Housing spending will total nearly £24bn. The money will be earmarked for “a multi-year housing settlement”. £11.5bn of this will be set aside to build up to 180,000 new affordable homes.
- Brownfield land will be targeted for new homes.
- £5bn will be made available to remove unsafe cladding from the highest risk buildings – partly funded by the Residential Property Developers Tax which will be levied on developers with profits over £25m at a rate of 4%.
- £640m a year for rough sleeping and homelessness.
- Business rates will be retained, but with changes.
- There will be a new one year 50% business rates discount for retail, hospitality, & leisure sectors. A tax cut worth almost £1.7bn and with Small Business Rates Relief over 90% of these businesses will see a discount of at least 50%.
- From 2023, Business Rates revaluations will be every 3 years.
- From 2023, every business will be able to make property improvements and for 12 months, pay no extra rates. Together with the new green relief these investment incentives total £750m
Responding, Isobel Thomson, safeagent Chief Executive, said:
“This wasn’t a Budget that held much for the PRS. While the increase in the National Living Wage and the Universal Credit Taper are welcome boosts for working tenants on low incomes, with inflation likely to hit 4% and the rising cost of living there are still challenges ahead for the most vulnerable. We know that agents and landlords are doing all they can to help keep people in their homes, but we are not out of the woods yet, as highlighted by the announcement of more funding to tackle homelessness and rough sleeping. We look forward to learning the detail around the Government’s announcement last week of £65m for local authorities across England to support low income tenants in rent arrears.”