SFHA warns rent freeze proposals “jeopardise” affordable housebuilding
One-year rent freeze would do little to increase tenant incomes, parliament is told.
The Scottish Federation of Housing Associations (SFHA) has warned that the Scottish Government’s rent freeze proposals “jeopardise” its members’ ability to build new affordable homes. Ahead of emergency legislation, The Cost of Living (Protection of Tenants) (Scotland) Bill, being introduced to the Scottish Parliament today (4 October), SFHA has said the policy would “do little” to increase the incomes of most social housing tenants but would lead to millions of pounds being cut from housing associations’ budgets, threatening their ability to build, improve and maintain existing homes and deliver vital support services to tenants.
SFHA has also written to the First Minister to call for the government to rethink the rent freeze, stating that the policy risks both its members’ ability to provide their tenants with targeted support during the cost of living crisis and the Scottish Government’s own ambitions on affordable housebuilding and climate change. SFHA will give evidence to the Scottish Parliament’s Local Government, Housing and Planning Committee shortly after the legislation is published, just hours before parliament begins to debate the plans.
Sally Thomas, SFHA Chief Executive, said:
“We understand and share the intention to help people who are facing real poverty and desperate situations as a result of the cost of living crisis. Our members see first-hand the seriousness of the situation and are doing everything they can to support their tenants. However, the Scottish Government’s rent freeze proposals have serious, unintended consequences which must be considered.
“Housing associations are not-for-profit, charitable organisations, whose rents are consistently around half the level charged in the private sector, without any government interventions. 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.”
Ms Thomas continued:
“The majority of social tenants will see little difference to their incomes as a result of a rent freeze. This is because between 60–70% of social housing tenants have their rents covered by welfare benefits paid by the UK Government. However, with rent being a vital source of income for our members, it would result in housing associations being forced to cut back on vital support services for tenants, the development of new homes, improvements to existing stock and the pursuit of net zero targets.
“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.”