MINISTERS have been accused of betraying the poorest in Scotland in the cost of living crisis by planning to lift a ban on rent increases for those letting from social landlords who now face increases of up to 11.1%  after the current rise freeze failed to work.

It comes as new analysis from the housing regulator has projected that social landlords' net operating surpluses will soar from £132m in this financial year to £305.2m in 2026/27.1

Nicola Sturgeon was told by the housing regulator in September that the current rent increase freeze to beat the cost of living crisis would not work as it covered a period when the vast majority of bills will not go up anyway.

The Scottish Housing Regulator said that the freeze would not help most of the 1m people who are living in social rented housing and had called for urgent action as rent arrears hit a record £169.63m.

The rent freeze announced by ministers as part of "the centrepiece" of the 2022-23 Programme for Government (PfG) was described as  "a PR con trick" and "impotent" as it started after bills go up and ends before they are due to rise again in April.

Now it has emerged that ministers are planning to extend the cap on rent rises for private accommodation only and is not extended 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.

Based on rental sector projections, the  housing regulator estimated that a rent freeze in 2023/24 would remove almost £60 million in rental income in that year from the business plans of registered social landlords.

There are estimated to be 2.6m homes in Scotland with nearly a quarter being social rented properties and 15% being leased privately.

The level of arrears for 2021/22 is at 6.3% of all rent due - the highest since the Scottish Social Housing Charter was introduced by the Housing (Scotland) Act 2010 and came into force in April 2012.

The charter set out the standards and outcomes that all social landlords should be aiming to achieve for their customers when performing their housing activities.

Last week tenants’ rights minister Patrick Harvie said he will recommend the approval the rent freeze extension on private rents only.

Mr Harvie said the social rent freeze would be lifted from April after the Scottish Government reached an agreement with landlords to keep rises below inflationary levels of 11.1%.

There are concerns that the poorest in Scotland face a heavy financial burden - after failing to benefit from the rent freeze anyway.

The Herald: Rent

The Scottish Tenants' Organisation said: "The Scottish Government’s position on the continuation of the rent freeze and eviction ban is a betrayal of low income social rented tenants in Scotland in that they will not be included in the extension of the rent freeze beyond 31st March 2023 exposing some of the most financially vulnerable tenants to rent hikes of up to 11 percent across Scotland.

"We are living through an existential cost of living crisis with thousands of social rented tenants and their families in Scotland facing the real prospect of homelessness and destitution with a rent freeze that has not protected social rented tenants in Scotland."

Nicola Sturgeon announced an eviction ban and a rent freeze in September as part of a series of measures to protect private and social tenants from the cost of living crisis.

But the regulator said that every social landlord in Scotland applied an average rent increase in April that was below the CPI inflation rate of 9% at that time, with some not increasing rents at all.

It said: "The Scottish Government may need to consider what more it can do to help social landlords to keep rents affordable and to continue to deliver for current and future tenants."

The 2021/22 findings from the survey of the National Panel of Tenants and Service Users found that 28% of tenants that responded have experienced difficulties affording their rent and other housing costs up from the previous year.

More than nine in ten respondents identified energy and food costs as to the fore in terms of increased cost of living, and just over 7 in 10 were concerned about future affordability of their rent.

Sean Clerkin, campaign co-ordinator for the STO said: "The rent freeze is a farce as the rent freeze has never helped social rented tenants in Scotland as their rents increased last April and now they are to be excluded completely from the extension of the rent freeze."

It comes as the leading membership body for property agents said before dropping of the freeze on private rents that some 85% of its member agents in Scotland have landlord clients who have expressed a wish to withdraw from the private rented sector and sell their properties.

It says it is more worrying that 68% of agents have already seen an increase in notices to sell due to the temporary measures such as rent controls.

Some 83% of agents stated that they would increase rents to reassure landlords they can cover rental loss as well as maintenance, utilities and mortgage interest hikes.

Tenants’ Rights Minister Patrick Harvie said: “Our emergency legislation has given people – whether they rent in the private or social rented sector – reassurance within their current tenancies through the worst of the winter, even as their other costs have been rising. We recognise the enormous pressures households are facing, which is why we have given social tenants advance notice of these changes, as well as the confidence that any rent increase will be well below inflation.

“The voluntary agreements we have reached with social landlords will keep rents well below what they are in the private market and limit rises next year, while allowing social landlords to continue investing in essential services such as home improvements and maintenance. The agreements are also based on the consultations which all social landlords have with tenants in advance of any rent changes."

The Scottish Government also said that the  Convention of Scottish Local Authorities,  the national association of Scottish councils, was  committed to keeping local authority rent increases to an average of no more than £5 a week.

A spokesman also said that members of the Scottish Federation of Housing Associations and Glasgow West of Scotland Forum of Housing Associations have reported planned increases averaging 6.1%.

The Herald understands that Queen’s Cross Housing Association and Maryhill Housing Association  in the north of the Glasgow are both proposing rises of between 7% and 9%.  North Glasgow Homes is currently  consulting over an increase of between 6% and 8%.