Social landlords must challenge expenditure to ensure rents continue to provide value for money for tenants, a new report published by the Scottish Housing Regulator has concluded.
The report is the outcome of the Regulator’s thematic review of rent increases by Scottish social landlords and is published in the context of the announcement by the Scottish Government of a rent freeze for landlords in Scotland until the end of March 2023. It also comes at a time when social landlords are starting the process to set rent levels for 2023/24.
According to the report, the average weekly rent was £85.36 in 2021/22 – that’s up by 1.8% from £83.84 on the previous year. It tates that landlords’ planned rent increases this year ranged from 0% to 6% and averaged 2.98% meaning every social landlord in Scotland applied a rent increase in April 2022 that was below inflation at that time and some did not apply any rent increases.
Speaking of the report, Shaun Keenan, the Regulator’s assistant director of financial regulation, said: “Keeping rents as affordable as possible for their tenants is a principal objective of all social landlords. And, in a context of rising inflation and significant pressures on the household finances of tenants, this objective has never been more important.
“The forthcoming annual rent setting exercise, and potentially those for some years to come, is likely to be the most difficult that landlords have faced, in which they will need to consider rising costs and inflation while recognising the financial hardship that is a reality for many of their tenants.
“Landlords should continue to vigorously challenge every element of their expenditure to ensure that it is necessary; it is focused on delivery of outcomes for tenants and others who use their services, and that it represents value for money.”
Speaking yesterday to tenants at the Tenants Information Service annual conference, and later with landlords at the EVH conference, Michael Cameron, the Regulator’s chief executive said: “The Scottish Government’s recent announcement of a rent freeze is a clear demonstration of the importance it places on landlords keeping rents affordable to help it achieve its social justice objectives on child poverty and fuel poverty.
“It is also looking to social landlords to invest significantly in tenants’ homes, including to improve energy efficiency and to decarbonise heating. In the context of a cost of living crisis for tenants, and an emerging cost crisis for social landlords, the Scottish Government may need to consider what more it can do to help landlords to keep rents affordable and to continue to deliver for current and future tenants.”
Sally Thomas, chief executive at the Scottish Federation of Housing Associations, added: “This report is a timely reminder that every social landlord in Scotland raised rents by less than inflation this year, as part of their efforts to support tenants through the cost of living crisis. Housing associations and co-operatives exist to provide good quality, affordable homes – that’s why rent levels in the social sector are typically half the level charged in the private sector. We will always work hard to keep rents as low as possible.”