Home Truths: Across Scotland tenants are hit hard by the cost-of-living crisis

In October, and approaching a hard winter made tougher by spiralling inflation and rocketing fuel costs, the Scottish Government introduced emergency measures aimed at safeguarding tenants from the worst the economy was throwing at them.

During a year in which the UK teetered on the verge of economic disaster, the Cost of Living (Tenant Protection) (Scotland) Act went beyond anything introduced by Westminster, placing a six-month moratorium on both rent increases and most evictions.

Those temporary measures have now been extended for a further six months as the “unprecedented economic challenges”, in the words of tenants’ rights minister Patrick Harvie, continue to “impact acutely on those who rent their home”. 

MSPs voted to ease the rent cap for private sector tenancies slightly, giving private landlords leeway of three per cent, and remove it altogether for social landlords with a caveat of an agreement that they would limit increases. Meanwhile, the pause on evictions was extended until the end of September when, just as Scotland prepares for another winter, it will lift. However, there is an option to continue these measures for yet another half-year. Standing now on the cusp of summer, with its lighter nights and promise of lower energy bills, it is difficult to imagine that this will not be used, because there is little to suggest that household incomes will have improved sufficiently to justify a return to rental-as-usual. Inflation, widely predicted to have decreased by now, still sits above ten per cent, as opposed to 6.6 per cent in nearby France. UK food inflation alone has risen at its highest level in 45 years – 19.1 per cent – with basics like milk increasing proportionally more than many luxury goods.

It’s compounding the hardship already experienced by so many in Scotland, where concerns about poverty are growing. Research by the Joseph Rowntree Foundation (JRF) has found a “dramatic” increase in the number of people living in “very deep poverty” over the last 20 years. In 1994-97, 310,000 people were understood to be in this category, living on just 40 per cent of the median household income. By 2019-20, that had increased to 460,000. The shift comes despite actions that have lifted more people out of poverty overall, particularly children and pensioners, the JRF said. The charity argues that the figures, which look at the period before the cost-of-living crisis, help to make sense of why the inflationary surge has been so damaging.

The latest figures from the Scottish Housing Regulator also help to demonstrate the scale of the problem, with social landlords reporting a record level of arrears. At close to £170m, the total arrears seen at the end of March 2022, and reported last September, was the highest level since the Scottish Social Housing Charter was set up a decade earlier – and a full £23m up on the figure recorded just two years prior. The level, the regulator said, is “an indicator of stress on household finances”. It’ll be some months before we learn where this total stands, one year on.

tenants are unable to afford rent increases and are quite scared of what will happen

What we do know is that, following the expiration of the social rents cap in February, average weekly rents for social tenants have gone up by around five per cent for 2023-24. Local authorities are charging an additional 3.8 per cent on average and registered social landlords (RSLs) a higher 5.34 per cent. However, the figures mask a wide variation for both councils and RSLs. South Ayrshire Council imposed a 1.5 per cent uplift, compared with 6.42 per cent in North Ayrshire. Elsewhere, Lochalsh and Skye Housing Association opted for eight per cent, compared with two per cent for Dalkeith’s Melville Housing Association. 

It’s a “massive postcode lottery”, says Rufus Bouverie of tenants’ union Living Rent, who argues that while the evictions pause and rent freeze have been a “huge relief” to renters, their temporary nature means that relief could soon wear off. “What we’re hearing from all of our members is it’s been a huge help and needs to remain in place until rent controls or something else can bring down rents,” he says. “What we are seeing day after day in our inbox has been tenants are unable to afford rent increases and are quite scared of what will happen with the rent cap. We are getting ten to 15 emails a week with tenants asking about their rights.

“Every member who comes to us says how stressful and anxiety-inducing it is. There’s a real sense that the situation is really detrimental for people. Up to half of people’s income goes on housing in some cases. Increasing wages is also vital, but we need to reduce our housing costs.”

Carolyn Lochhead of the Scottish Federation of Housing Associations (SFHA) says RSLs are “trying to absorb” the impact of the cost-of-living crisis “as much as they can”. “The core purpose of housing associations is to provide safe, warm, affordable homes for life. Costs are going up across the board [but] affordability is the key concern”, she tells Holyrood. However, she says there remains a “real worry”, particularly for those who cater for especially vulnerable groups like older clients or people with disabilities, that some costs will need to be passed on. Specialist housing providers tend to bulk buy energy in advance from suppliers, she explains, but the price of doing that has “absolutely shot up”. 

According to a survey commissioned by the Scottish Government and carried out by pollsters YouGov in late March, 11 per cent of Scots are concerned about being able to pay their rent or mortgage over the next two-to-three months. Overall, 24 per cent said they were struggling to meet household bills. While 32 per cent of respondents said their household was managing well financially, 43 per cent said they were just getting by and 22 per cent said they were doing less well. Meanwhile, only 33 per cent said they would know where to find financial help and support if they needed it. 

Responding to the findings, homelessness charity Crisis warned that higher everyday costs risk pushing those who are only just hanging on into homelessness. “Our services in Scotland have been reporting rising demand for months, including from families, and it’s clear that without urgent action we face the prospect of a huge spike in homelessness,” its chief executive Matt Downie said, calling for the UK Government to raise housing benefit and the Scottish Government to do more to prevent homelessness.

The Scottish Government bills its new “fair economy” plans as part of the answer, promising a “strong” economy which will be “underpinned by the most progressive tax system in the UK” by 2026. Revenues raised will be used to “tackle poverty and grow the wellbeing economy” as well as delivering public services, it says, with the number of workers earning at least the real living wage to grow, boosting pay packets. On top of the extensions to tenants’ protections, it has unveiled further proposals to ease housing pressures, which include charging second homeowners double the full rate of council tax.

Announcing his priorities, new housing minister Paul McLennan said his central aim is “for everyone to have a warm, safe, affordable home that meets their needs”, and that he’ll work to increase and accelerate housing supply, tackle homelessness and end rough sleeping. A total of 110,000 affordable homes are promised by the end of 2032, at least 70 per cent of which are to be for social rent. “We are also taking steps to make the right to an adequate home a reality, tackle high rents and increase stability for those in the private rented sector and give local authorities the tools they need to improve access to housing in their local areas,” McLennan told the media.

These are actions which should go some way to address affordability and availability issues across the next decade, but they will be little salve to those currently facing crisis and who need more immediate intervention. Visiting Scotland recently to receive the Edinburgh Medal for her work on food politics, US professor Marion Nestle spoke of her “shock” at the level of food bank usage here, noting “how great the demand was and how much [it] has increased since the pandemic”. “More people are having more struggles because they don’t have enough money,” she said. “That’s what I was hearing from one after another of these groups, all of whom are doing fantastic work.”

Lochhead says social landlords are well aware of the struggles facing their tenants and have collectively invested around £23m on support measures, including the provision of direct advice to help households identify what extra income, if any, they are eligible for. They have redistributed around £6.5m through the Fuel Insecurity Fund and want to see Chancellor Jeremy Hunt explore the creation of a special energy tariff for social housing tenants. She points out a 24/7 help service rolled out by the West of Scotland Housing Association as further evidence of what SFHA members are doing to address the impacts of the cost-of-living crisis.

The initiative includes unlimited access to counselling and trauma support. In the east of the country, Kingdom Housing Association is distributing shopping vouchers, carpets and curtains to struggling customers. “The message from us is if you are worried, the first thing you should do is talk to your housing association,” Lochhead says. “Housing associations are absolutely there to help and the sooner you talk to them, the sooner they can start doing that. We are very keen to get that message out to politicians – go to local housing associations and talk to them, they are motivated to give that support.”

However, the vulnerability in the social rented sector means evictions are not unknown. Current legislation allows for eviction proceedings to take place where social housing tenants have arrears over £2,250, or around six months’ rent. Housing charity Shelter Scotland reports dealing with more than 80 such cases during the first ten months of 2022. This group had average arrears of £5,700.

Choosing if it’s your rent you pay or for food, that’s not a choice

But RSLs insist they want to avoid such actions. Laura Pluck, director of communities at Scotland’s biggest RSL, Wheatley Group, says it took a proactive approach to supporting clients, launching its £6m Here for You campaign last year in response to the economic crisis and commissioning a study on the impact of Universal Credit. That found that 65 per cent of claimants felt the payment was too low to cover their basic needs, while 86 per cent said it had an adverse impact on their mental health. “Trying to live on £243 per month, that’s horrible,” one respondent said. “I’m expected to feed myself, pay my council tax gas and electricity, pay debt and rent arrears. It’s physically impossible to pay for all that and, of course, also your internet or some kind of mobile phone with internet, which you need to have if on Universal Credit.” 

“Choosing if it’s your rent you pay or for food, that’s not a choice,” Pluck tells Holyrood. “In the last year, it has been critical that we have been able to support people with this crisis. We are well-skilled across our frontline teams; we know our customers and we know our communities. We know which customers are less able to engage. There’s a level of tenacity in being able to reach out to them. It’s incredibly challenging for some individuals who face some really hard choices. It’s concerning if our customers can’t pay rent. We don’t want them to get into debt and fall behind.”