Scottish housing associations urge government to rethink emergency rent freeze

This means that social housing providers and private landlords will be unable to raise rents until “at least” March 2023. The move has been welcomed by tenants’ unions and housing campaigners across the UK.

Landlords in the private rented sector, however, have raised concerns that the move could further squeeze supply of available homes. Among social housing providers, there are fears that the loss of rental income will constrain the construction of much-needed new affordable homes and refurbishing existing stock.

Sally Thomas, chief executive of SFHA, said that while she understood and shared the intention to help people facing real poverty and “desperate situations”, the freeze would not make much difference to social housing tenants’ income, given that up to 70% of rents are covered by benefit payments.

It would, however, have a huge impact on housing associations that rely on the rental income and that they would be forced to cut back on developing new homes, improving existing stock and the “pursuit of net zero targets”.

Ms Thomas said: “Housing associations are required by law to set social rents in consultation with tenants, providing them with certainty about their rents as part of a tenancy that is theirs for life.

“As a consequence of the power to set their own rents being removed, our members will find it difficult to consult with tenants as usual and cannot plan their vital work for next year. This removes power from tenants and reduces their say in their rents and services, effectively side-lining them from the process.”

Until now, there has been no government intervention at all in Scottish social housing providers setting rents, with housing associations and co-operatives free to set their own rents, within the limitations set out in the Scottish Social Housing Charter.

This is in contrast to England, where councils can raise rents up to a maximum of the Consumer Price Index (CPI) of inflation plus 1%. Amid soaring inflation, the government is proposing to tighten this cap in a bid to stop social housing tenants being hit by huge rent hikes.

The current proposals are looking to cap increases by 5%. According to government estimates, this could see £1.3bn taken out of social housing providers’ budgets next year. 

Ms Thomas added: “We are urging the Scottish government to think about the longer-term consequences of any proposal for a rent freeze beyond March 2023. These could be hugely damaging for tenants. SFHA is keen to work with the Scottish government, and other stakeholders, so that, together, we can find solutions that work for tenants, social landlords and the government.”