Scottish families priced out of affordable housing by UK austerity policies

Families on housing benefit are being priced out of homes across Scotland, according to new data that highlights the crisis in affordable rents.

UK-wide research by the Bureau of Investigative Journalism, shared with The Ferret, shines a light on the dearth of accommodation families on benefits can afford in Scotland’s largest cities and in rural areas.

In Lothian, with a population of over 850,000 including Edinburgh, just 12 out of 662 rental properties advertised met the affordability criteria for families on benefits. In the Highlands, which has a population of over 235,000, just two affordable two-bedroom properties were identified for rent.

The study was based on details collected of 62,695 two-bedroom rental properties available for rent on a single day across Scotland, England and Wales that were affordable based on the value of the local housing allowance (LHA). This rate was frozen as part of the UK government’s austerity policy in 2016.

The allowance, which varies from region to region, was supposed to cover the cheapest 30 per cent of the local rental market. However, despite the freeze, rents have kept rising meaning as little as 1.8 per cent of the market is actually available to families on benefits looking to rent in some areas of Scotland.

The Scottish Government said the data proved the policy was not working and called on the UK government to “reverse its damaging welfare reforms”.

Across Scotland the snapshot study suggested 19.5 per cent of the market was available for families on benefits, considerably higher than the six per cent UK-wide average but still well under the 30 per cent target.

Lothian was the least affordable area in Scotland with less than two per cent within the affordable range. In Glasgow less than six per cent of the market was affordable with just 31 out of 525 properties meeting the range made possible by the LHA of £120.03 per week.

In West Lothian, where the LHA is set at £121.22, just four properties out of 71 advertised were affordable.

Just two of Scotland’s rental areas met or exceeded the aim to ensure 30 per cent of the market was affordable. In Aberdeen city and shire 33 per cent of properties were affordable based on the LHA of £133 and in Ayrshire, where the LHA is £97.81, 40 per cent of the market should be affordable to families on benefits.

Further investigation, however, revealed that even those homes are often out of reach, because many landlords won’t let to benefit claimants. Reporters from the Bureau contacted the landlords of 180 two-bed properties claiming to be a single mother with an eight-year-old daughter. Just over half of the landlords said that they would not let to anyone on benefits.

Of those that were left, more than half said they would consider letting to the hypothetical family, but only if they could fulfil further conditions, such as paying six months’ rent in advance or providing a guarantor. One property site asked for a week’s rent in advance to even talk to the landlord.

Some were more blatant with 80 of the adverts across the UK explicitly stating: “No pets. No DSS [a slang term for benefits claimants]” or “no housing benefit”. The issue was raised earlier this year by a Glasgow-based legal firm, which held a public meeting to discuss concerns that the practice was becoming more frequent across the city and its view that it may be open to a legal challenge.

The housing charity, Shelter Scotland, raised concerns about the unwillingness of private landlords to rent to those in receipt of benefits in its No DSS report in 2017.

The charity’s chief executive, Graeme Brown, told The Ferret that Scots were being forced into “a hand to mouth” existence, pushed into private properties where they had to top-up rental costs they could not afford, due to the shortage of social homes.

Brown said: “Scotland is in the grip of a housing emergency because we have failed to invest in social homes for most of the past 40 years.  That failure means more and more people, including families rely on the private rented sector for their long-term home.

“Thousands of people living in the private rented sector end up homeless each year. Local housing allowance which often goes to people in work, hasn’t kept pace with private rents leaving people cutting back on other essentials to make up the shortfall in their rent.

“We need to build much more social housing but in the meantime we also need the UK government to unfreeze and up-rate Local Housing Allowance.  It has to cover the real cost of renting a home in the private market so people aren’t living hand to mouth to keep a roof over their heads.”

Average monthly mortgage payments in Scotland are just £442, on a par with the very lowest of the rental market. According to a Bank of Scotland study last year, mortgage payments had fallen considerably over the last ten years and yet more people than ever were priced out of home ownership.

The new figures also highlighted the way those on benefits are being priced out of the UK’s capital cities, including Edinburgh. In central London, which has one of the highest rates of LHA at £320 a week, out of more than 4,400 two-bed homes advertised as for rent, only seven were affordable.

Jon Sparkes, chief executive of Crisis – who also chaired the Scottish Government’s homeless and rough sleeping action group last year – said: “We should all have a safe and secure home. This investigation paints a clear picture that for the overwhelming majority, we’re not meeting this basic human need. This is simply unacceptable – we can and must do better.

“Housing benefit is a tool to prevent people from being forced into homelessness in the first place. But rates are currently failing to cover the cost of even the cheapest private rents in the majority of areas, pushing people to rent more expensive properties and making up the difference – skipping meals or not putting the heating on to try and ease this financial pressure and keep the roof over their head.”

David Hanson, of tenants’ union Living Rent, added: “These figures only confirm what Living Rent has seen in communities throughout Scotland – that there is not enough affordable housing. The Scottish Government must focus on tackling the central problem: that rents are in most cases are too high.

“It is time for the Scottish Government to implement genuine rent controls across Scotland to curb spiralling rents and housing-related poverty. Comprehensive rent controls tied to quality and affordability rather than the market, similar to what we proposed last year, are key to protecting tenants from an exploitative housing market.”

Housing minister, Kevin Stewart, said: “Evidence shows the UK government’s under investment in the Local Housing Allowance means it is not serving its intended purpose and we have repeatedly called on the Department for Work and Pensions to change LHA rates.

“We are continuing to push the UK government to reverse its damaging welfare changes, which put people at risk of homelessness.”

Stewart added: “We are doing all we can to mitigate against the worst impact of UK government welfare cuts in Scotland and last year we invested over £1.4 billion to support low income households. We are also delivering on our sustained and long-term commitment to increase the supply of affordable homes, with more than 87,000 delivered since 2007, with nearly 60,000 of these for social rent.”

A UK government spokesperson said: “Providing quality and fair social housing is an absolute priority. The government increased more than 360 Local Housing Allowance rates this year, by targeting extra funding at low-income households.

“We’re investing over £9 billion in affordable housing and an additional £2 billion after 2022. And we have abolished the Housing Revenue Account borrowing cap – giving councils across the country the tools they need to deliver a new generation of affordable housing.”

This story was published in co-operation with the Bureau of Investigative Journalism. Illustrations courtesy of Harry Woodgate.