Private renting in some areas 'completely unaffordable'

In some areas of Scotland renting is "unaffordable", the report says

Private renting has become "completely unaffordable" in some areas of Scotland, according to a new report.

The Scottish government paper blames Westminster welfare policies, in particular the introduction of Universal Credit, on the increase in rent arrears.

The new system has had a "substantial impact" on the number of people falling behind and the amount owed, it said.

It added that soaring arrears affected landlords' ability to collect rents.

A UK government spokesman said that help with housing costs was available from day one on Universal Credit and pointed out the Scottish government now had powers to create new benefits, or top up existing ones.

He also said landlords could apply to have rent paid directly to them if their tenants were in arrears.

The Scottish government report said that almost three quarters (72%) of social housing tenants in East Lothian claiming Universal Credit were behind on their rent, compared with 30% of all tenants in the region.

Knock-on effect

The report also said that about one fifth of Scotland's 2.4 million households get UK government assistance with housing costs.

Tenants' response to welfare reform was varied, researchers found, but they said some may prioritise other costs over rent and fall into arrears, while others prioritise rent over other outgoings such as food or heating.

The report also said that private landlords may evict tenants who fall into rent arrears through the impact of UK welfare changes and could avoid taking on tenants on benefits in future.

The introduction of Universal Credit is being blamed for the current rent situation

And revenue lost to landlords in the social rented sector through rent arrears could affect services provided to other tenants, rents charged, and the ability to invest in new homes.

The report said that privately-rented housing had become "completely unaffordable in some areas" due to a freeze on local housing allowance.

In Edinburgh, those getting help with housing costs for a one-bedroom flat would only be able to afford 5% of available properties, not the 30% envisaged by Westminster.

'Devastating impact'

The report added: "It is clear that the actions of the UK government, in its areas of reserved competence, are having an impact on the operation of the housing sector which should be subject to devolved competence.

"In some cases the impact may be contrary to devolved priorities."

Scottish Housing Minister Kevin Stewart called on the UK government to rethink its welfare reforms.

He said: "It is clear that UK government welfare cuts are having a devastating impact, with money taken from the pockets of people across the country, pushing them into crisis and debt.

"We are doing all we can, with the powers we have to protect those on low incomes from these devastating UK government cuts - spending more than £125m this year alone to do so.

This includes £62m to fully mitigate the 'bedroom tax', help for those impacted by the freeze in local housing allowance, as well as providing support for low-income households."

'Pre-existing arrears'

A UK government spokesman said: "Under Universal Credit, claimants can receive support through 100% advance payments, including housing costs, available from day one.

"We have also introduced two weeks additional rent payment for people joining UC from Housing Benefit, and landlords can apply to have rent paid directly to them if their tenants are in arrears.

"The best way to help a person pay their rent is to help them find work, and Universal Credit is succeeding at getting people into work faster, and helping them stay in work longer."

He added: "Our research shows that many people join Universal Credit with pre-existing arrears, but the proportion of people with arrears falls by a third after four months in UC.

"Through the 2016 Scotland Act, the Scottish government now has the power to create new benefits or top up existing ones.

"We have also already introduced Universal Credit choices for the Scottish government, and we remain committed to working with them through our dedicated Scottish Devolution Programme."