The spending cuts announced in the budget contain "very bleak news" that could lead to misery for the Charedi community, the country's largest Jewish housing association has warned.

Chancellor George Osborne's announcement of a freeze on child benefits and cuts to housing benefit have been met with serious concern by the Agudas Israel Housing Association.

Families on housing benefit will receive a maximum of £400 a week for properties with more than three bedrooms as the government attempts to save £1.8 billion by the end of this parliament.

There will be a further 10 per cent cut for unemployed people who receive housing benefit after a year of looking for work.

David Levenson, Agudas's finance director, said: "The combination of these things can only lead in one direction. There will be further overcrowding for Charedi families, and at worst there's the threat of a number of households being evicted.

"If benefits are capped and families cannot pay the rent, then they will be thrown out."

Mr Levenson predicted that the difference his organisation could make would be severely diminished, given the number of families likely to need additional help.

"At a time when the government is looking to make cuts, the provision of new social housing will also be hammered, so it is a squeeze on both sides."

Agudas expects to feel the pinch most in London, but Mr Levenson warned the capital would only be a microcosm of the wider problem, with Jewish communities in Manchester and Gateshead also likely to feel the effects of the cuts.

"In Stamford Hill we deal with more than 2,000 families in private rented accommodation. Some are quite substantial families who are already in properties not ideally sized for them.

"But there appears to be no regional variation on the housing caps. Rent might be more manageable in Gateshead, but it is borderline in Manchester, and in London it will cause real pressure."

Mark Cunningham, director of community services at Manchester Jewish Federation, agreed the budget may have an impact on services and staffing.

He said: "A great deal of our work is with people who are on low incomes or are disabled or vulnerable. We do a significant amount with children and families. Everyone was expecting to take a hit. Rents in the areas we work in are high, so that cap will have an impact."

One concern surrounds the possibility of cuts in local authority funding, but Mr Cunningham said the Fed hoped the high level of service it offers would provide some protection.

He said in recent months the Fed had seen a "phenomenal and dramatic" increase in requests for help compared to last year.