ScotGov rent freeze fails to stop debt soaring to record £190m

It has led to new calls for government action to curb rent rises for the most vulnerable tenants with fears that the "out of control" debt will lead to a greater spike in evictions and homelessness across the country.

Official analysis seen by the Herald shows that rent debt in social housing rose by over £20m in the past year alone - despite a bill freeze brought in by the Scottish Government to support people through the cost-of-living crisis. The rise in the previous year was over half that at just £9m.

The revelation comes as the Scottish Government pledged on Tuesday to introduce measures to enhance tenants’ rights and protections as well as long-term rent controls.

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First Minister Humza Yousaf told MSPs he planned to introduce a new housing bill which would help to deliver its New Deal for Tenants as part of new housing policies aimed at tackling homelessness and a supply shortage.

The arrears now make up 6.9% of the total rent due to landlords - up from 5.8% in 2019/20 when the debt was at £146.83m. The debt is at its highest since the Scottish Social Housing Charter was introduced by the Housing (Scotland) Act 2010 and came into force in April 2012.

The Scottish Tenants Organisation (STO) said the debt mountain was "out of control" and that the nation was facing a "housing and homelessness disaster".

They said the rising debt created a "real problem" for tenants "with recent rent increases as high as seven or eight percent in a lot of instances which will lead to more evictions and homelessness amongst social tenants."

They feared there would be tens of millions more in rent debt in the private sector in Scotland.

Housing campaigners Living Rent said: "The numbers don’t lie. Such a sharp increase in rent arrears shows how Scotland’s most vulnerable tenants are being left behind."

Details of the rent debt have come despite the then First Minister Nicola Sturgeon announcing a rent freeze in September, last year to help private and social tenants in a cost of living crisis.

Rent increase notices between September 6, last year and March 31, 2023 were seen as void.

But it was replaced by a 3% rent cap for private tenancies only in April which was to remain in place till the end of this month.

A further six-month extension was agreed by ministers meaning landlords with properties within Scotland will continue to face restrictions to rent rises until March 2024.

Ministers were accused of betraying the poorest in Scotland in the cost of living crisis by not extending the cap to those renting from social sector landlords such as councils and housing associations who tend to provide lower cost accommodation taken by the poorest and most vulnerable in the country.

There are estimated to be 2.6m homes in Scotland with nearly a quarter being social rented properties.

The Scottish Housing Regulator has said that the the cost of living crisis was leading to "significant hardship" for many social housing tenants, including "some of the most vulnerable in our society".

It said in an analysis of the debt that minimising increases in rent "will help many tenants during this difficult period".

The regulator said social landlords had made "significant efforts" to minimise the level of rent increases.

"Many landlords told us that rent arrears increased as a consequence of the cost of living crisis, and that they are continuing to support their tenants and other service users with a specific focus on preventative measures such as maximising household income," said the regulator.

In March it emerged that rents in Scotland in the social rented sector had risen by up to 8% while those in the private sector were capped at 3%.

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Rent rises approved by over 100 housing associations in Scotland hit an average of 5.34% and ranged between 0% and 8%. The typical rent rise in homes controlled by local authorities was at 3.8%.

It comes after the Herald revealed that council tax debt has increased by nearly two thirds since the pandemic with concerns grow that the cost of living crisis will make things worse.

The amount of council tax that remained outstanding amounted to £115.924m on March 31, 2022.

In 2018/19 before the pandemic hit, the council tax debt stood at just £71.035m - a rise of just over 12% on the previous year.

Sean Clerkin STO campaign co-ordinator said: "The Scottish Government has to immediately establish rent controls in the social rented sector and substantially increase their investment now in building many more social rented homes if they are to truly tackle poverty in Scotland. Anything less will lead to disaster."

Aditi Jehangir, secretary of Living Rent added: "With rent costing a third of the average salary, rising to half the average salary for the lowest paid, housing is simply unaffordable.

"Many private sector tenants have benefitted from a rent cap but social tenants have had no equivalent cap with some seeing their rent increased up to 7%.

"The government said that rent increases in social housing were to allow for repairs and development of the sector. But this creates a blackmailing trade off between rising rents or poor housing quality.

"The solution is clear, the Scottish Government needs to invest in social and council housing to bring our homes up to standards. Tenants shouldn’t foot that bill. The government needs to introduce measures to ensure that no tenant will be evicted for rent arrears and provide greater support to bring rent arrears down."

The latest figures show that more children than ever are homeless and living in temporary accommodation in Scotland.

As of March this year, 9,595 youngsters were in the system - the highest since Scottish government records began in 2002.

In total, there were 29,652 open homelessness cases in March, which was a 15% rise from last year.

Meanwhile, homelessness applications increased by 9% in 2022-23 while there was a 1% drop in cases being closed.

Tenants’ rights minister Patrick Harvie said: “Our emergency legislation, introduced in October last year, pauses the enforcement of eviction orders for six months except in a limited number of circumstances - allowing tenants across the rented sector extra time to seek support and find alternative accommodation.

“Since 1 April 2023, private landlords have been able to increase a tenant’s rent in-tenancy by up to 3% or can apply to Rent Service Scotland for approval of an increase of up to 6% in specific circumstances. Social rented sector tenants are protected by the voluntary agreement reached with social landlords on below-inflation rent increases for this financial year.

“Scotland has some of the strongest homelessness legislation in the world and local authorities have a legal duty to help anyone who is facing homelessness.”