Rent and Mortgage Arrears (Support)

– in the Scottish Parliament on 15th January 2019.

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Photo of Pauline McNeill Pauline McNeill Labour

2. To ask the Scottish Government what it is doing to support the reported increasing number of people who are struggling to pay their rent or mortgage. (S5T-01438)

Photo of Aileen Campbell Aileen Campbell Scottish National Party

A decade of austerity, alongside the United Kingdom Government welfare cuts and benefits freeze, and the impact on local housing allowance and housing benefit, has taken its toll. That is one of the reasons why we established the financial health check service last year to support low-income families to maximise their household incomes.

We are also supporting people through a number of other actions. This year alone, we are investing over £125 million to mitigate the worst impacts of welfare reform—including, in effect, abolishing the bedroom tax—and to support those on low incomes.

In housing, our Private Housing (Tenancies) (Scotland) Act 2016 has improved security for tenants, limiting rent rises to one per year with at least three months’ notice. It also provides tenants with the power to challenge unfair increases.

Since 2007, we have helped more than 28,000 households to buy their own homes through shared equity schemes. Vitally, we have delivered more than 80,000 affordable homes since 2007 and we are on track to deliver on our 50,000 affordable homes target for the current session of Parliament—a commitment that the UK Government’s approach to Brexit could jeopardise.

We, of course, do not want anyone to have to worry about paying their rent or mortgage or any other bills, and I urge anyone who is struggling to seek independent advice as soon as possible.

Photo of Pauline McNeill Pauline McNeill Labour

I thank the cabinet secretary for that comprehensive reply.

New research on behalf of Shelter Scotland found that 12 per cent of respondents were struggling to pay their rent or mortgage, which is equivalent to 200,000 households. Recent figures show that the cost of private rented housing has soared above inflation in many parts of the country. In a year, the rent for one-bedroom properties in Glasgow increased by an average of 4.2 per cent, the rent for two-bedroom properties in Edinburgh and the Lothians increased by an average of 6.5 per cent and, staggeringly, the rent for four-bedroom properties in the Borders increased by 25.6 per cent. Does the cabinet secretary agree that it is time for more radical legislation that restricts high rents in order to protect ordinary people from such exorbitant increases?

Photo of Aileen Campbell Aileen Campbell Scottish National Party

I am well aware of the report and the research that Shelter carried out, which has some very important messages for everybody in this Parliament. I echo what Shelter says in its report about making sure that people seek advice as soon as they possibly can if they have financial worries.

Pauline McNeill is right to point out some of the imbalances around rent in the private rented sector. That is why I pointed out some of the legislation and work that we have taken forward to ensure that rent increases are limited to one in 12 months.

I also point out, though, that the latest data from the Office for National Statistics shows a 0.5 per cent annual increase in rents to November 2018 across all private tenancies in Scotland, which is lower than the annual increases that have been seen in England.

She is also right to point out the disparities between different parts of the country—she mentioned Glasgow and Edinburgh. Again, that is why we have provided local authorities with discretionary powers to apply to ministers to designate areas of high rent increases for existing tenants as rent pressure zones. That approach allows local authorities to cap rent increases at a minimum of the consumer prices index plus 1 per cent.

We must consider the basket of measures. I will be happy to work with Pauline McNeill to explore ideas that she might have. The Government has made a commitment to deliver 50,000 homes in this parliamentary session as well as taking forward the other measures that I set out in my answer to her original question, such as the 2016 legislation. If she has ideas about where we could do more, I will be happy to hear them. We have taken forward a comprehensive package of work to try to protect people in the private rented sector as best we can, but if Pauline McNeill wants us to do more I will be happy to have that discussion with her.

Photo of Pauline McNeill Pauline McNeill Labour

I thank the cabinet secretary for her offer to work with me on some ideas. She must now agree that the rent pressure zones policy has completely failed. It might have been right at the time, but it is no longer right. The City of Edinburgh Council has said that rent pressure zones have not been designed in a way that will work effectively and has asked for a review of the policy. Shelter found that currently no data sources are available that provide the information that is needed for a rent pressure zone application.

Whatever the intention behind the policy, it is not working; it has failed.

Given the issues, on which I think that the cabinet secretary and I agree, is it time for a more radical approach and to revise the legislation, to enable ordinary people to stop exorbitant rent increases by making applications as individuals, instead of having to rely on their local authorities?

Photo of Aileen Campbell Aileen Campbell Scottish National Party

The policy should be viewed in the context of our target to deliver 50,000 affordable homes, many of which are for social rent. I hope that the Labour Party views that target as important, along with the £800 million that is in the budget to deliver on it, and I hope that Labour members will support our approach in their budget negotiations with Derek Mackay, because it is important to ensure that people have security through the social rented sector as well.

I have set out the package of legislative measures that we have taken to protect tenants, and I will be happy to explore areas where we can do more. The most recent statistics show that annual rent increases are lower in Scotland than they are in the rest of the United Kingdom.

Of course, that does not take away from the fact that, in the here and now, people are struggling. That is why the issue is linked to our work to tackle austerity and to mitigate the worst impacts of welfare reform and to our work to address people’s financial concerns through the financial health check service, which helps people on low incomes to maximise their incomes and manage their household budgets.

We are doing a huge amount of important work, across many portfolios, to help people to deal with the challenges that they face in the here and now. I again offer to discuss with Pauline McNeill what more we can do, if she thinks that there are other solutions that we can take forward on top of all the work that we are doing at the moment.

Photo of Graham Simpson Graham Simpson Conservative

Pauline McNeill mentioned rent pressure zones. So far, not a single council has applied to have a rent pressure zone. It might be worth the cabinet secretary’s while to look at why that is.

The cabinet secretary has said that the Government is “on track” to deliver 50,000 affordable homes, but last year just over 5,000 homes were built, and if we continue at that rate, the Government will not meet its target until 2026. What is the cabinet secretary doing to get things on track? Can she pledge to build—not “deliver”—50,000 affordable homes during this parliamentary session?

Photo of Aileen Campbell Aileen Campbell Scottish National Party

We can get caught up in semantics here. My priority is to deliver 50,000 houses in this parliamentary session. The policy is backed up by £800 million in the budget and by £3 billion over the session. I hope that that garners support from members of parties across the Parliament, because we are on track to deliver that considerable and significant housing stock for the people of Scotland.

It is worth pointing out that, between 2012 and 2017, more council houses for social rent were delivered across 32 local authority areas in Scotland than across 326 local authority areas in England. That shows the success that the Government has had in housing and in delivering affordable housing for the people of Scotland. Graham Simpson might want to get caught up in the language, but I will get busy with ensuring that we make good on our ambitious target.