In the campaign to justify recent increases in social housing rents, the word “average” is doing a lot of heavy lifting. It was there in December when the Scottish Government announced there would be no social housing rent freeze. Tenants need not worry, we were told, as the average increase would be only 6.1%. Furthermore, The Minister of Tenants Rights Patrick Harvie anticipated, “many rents will be increased at a level below these average figures” although “there may be some social sector landlords who will…go beyond this level.”
This convenient misinterpretation of “averages” continued into March. The Scottish Housing Regulator (SHR) made positive assurances to the press. This non-ministerial body- whose aim is to regulate and oversee conduct across registered Social Landlords announced that they’d crunched the numbers and the average rent rise was now down to 5%. This new figure, however, is based on the number of social landlords (i.e arrived at through median range) and hides the actual impact on tenants.
For example, using figures freely available on SHR’s website, I can calculate that the rent of around 144,700 housing association tenants increased by more than 5%. That’s not “some” tenants, that’s almost half of all HA tenants. It includes 63,400 tenants whose rent went up 6.5% to 7%. In his official statement to the news, this was shrugged off by the Minister with the observation that social housing rent is less than private rent.
Such an attitude suggests the “new deal” for tenants’ legislation will make no difference to social housing tenants. As a reminder, the New Deal was the proposed framework widely consulted on last year, and which is supposed to inform the new policies of the Scottish Government to strengthen tenants’ rights. It is now conceivable that as Social Tenants, we’ll be told to look at our existing rights compared to private sector tenants, and feel grateful for what we already have. In theory this is true, in practice landlords are allowed, by regulators, to circumvent tenants’ rights.
A recent example would be the rent consultations around Scotland. Landlords claim tenants voted for the current rises. The truth is that these consultations were typically run on the basis of – “do you want a high rent increase or an even higher one?” Some tenants will naturally tick the box that says “the lesser of the evils please.” Tenants who don’t agree with either option can’t vote and are not counted.
A particular reason why the new deal is unlikely to benefit social housing tenants is that there is nothing in The Bute House agreement*, of any significance, that redistributes wealth. Therefore, there is nothing to take the financial burden off tenants, who are paying for the new build in social housing. In other words, tenants are never going to be allowed a rent freeze because, as inflation increases, interest rates increase, and mortgage payments go up. Increases that social landlords are paying out of rent revenue.
Last October the SHR published a report analysing the borrowing of registered social landlords for the year to March 2022. At that time the overall debt was £6.55 billion. 27% of which was on variable interest rates, where “every 1% increase in interest rates will increase interest charges by around £13 million”.
My landlord, Caledonia HA, recorded in their Board Minutes last December that they had budgeted for interest rates being 1%. This meant that the rise in interest rates, along with the rise in anticipated final costs for several projects, had led to a number of planned maintenance projects being suspended. That outlook for maintenance budgets deteriorated in subsequent months as interest rates increased from 3% in December to 4.5% in March.
Misinformation or being economical with the truth are other ways in which landlords circumvent existing tenant’s rights. Tenants of housing associations are told their landlords are investing in new housing, when it is actually the tenants who pay the price. 22% of my rent this year will go straight back to the bank in interest payments.
If The Green Party had ambitions beyond looking ministerial, they would not be using social housing tenants as a comparison tool. They’d be looking at making the regulation of existing rights serve the tenants. Something that would in the end benefit all tenants.
*Bute House Agreement: A power-sharing agreement between the Scottish National Party (SNP) and the Scottish Greens which was agreed in August 2021. It was based on cooperative policies to “build a greener, fairer, independent Scotland.”
Tommy Lusk has been involved in the making of a new film produced by Jack Guariento with an eye on conditions for Social Tenants. “Bellsmyre Caledonia” has been showing at arts venues across Scotland. It will be showing next on Apr 30th at the Alchemy Film Festival in Hawick, the Borders. For more details on how to get along visit the alchemy website here
– Note from Leo Plumb – Networks Coordinator for Common Weal
Tommy assesses the rent rises faced by social tenants in this article. Changes to housing policy are clearly on the agenda this week in Scotland. However, as he rightly points out, there are inequalities being glossed over. Both ministers and independent bodies seem to be disguising imbalances as progress. We’ve written previously about surges in rent in reference to the Rent Freeze, a freeze which effectively never happened in Scotland. With this in mind, as you read about percentage points increasing, I would recommend that you consider how such increments significantly push people further towards destitution over a period of months and years.
Social housing is provided by a social ‘landlord’, In Tommy’s case he is a Social tenant of a Housing Association. Of course another important part of the rental sphere is the Private Rented Sector (PRS). This is where tenant’s lease a home from a private landlord and usually via a letting agent. Tommy exposes something which should not be forgotten in this current climate: Powerful people and organisations make significant attempts to muddy the distinction between the two parts of the sector. And inversely, when it suits they choose to emphasise differences between the two types of renters. In my opinion, such comparisons ave been used (especially since the pandemic) as an instrument to play one type of tenant off against the other, in order to weaken the alternative proposals we need in Scotland. and these tactics are unjust.