Agreement reached on social housing rent rises

Ministers have reached an agreement with social landlords on below-inflation rent increases for the next financial year.

Under the Cost of Living (Tenant Protection) Act 2022, rents are effectively frozen in the social rented sectors until 31 March 2023. Landlords were concerned that this would restrict their ability to maintain and improve properties.

COSLA, the Convention of Scottish Local Authorities, has now committed to keeping local authority rent increases to an average of no more than £5 a week, while members of the Scottish Federation of Housing Associations and Glasgow West of Scotland Forum of Housing Associations have reported planned increases averaging 6.1%.

The reference to average figures, rather than a fixed cap, allows for the flexibility to honour the outcomes of the statutory tenant consultations that social landlords must undertake each year on rent setting.

Decisions on future plans for the private sector rent freeze, as well as other measures contained in the Act, will be announced by the Government in the coming weeks.

Tenants’ Rights Minister Patrick Harvie said: "Our emergency legislation has given people – whether they rent in the private or social rented sector – reassurance within their current tenancies through the worst of the winter, even as their other costs have been rising.

"We recognise the enormous pressures households are facing, and by making this announcement now we aim to give social tenants advance notice, and confidence that any rent increase will be well below inflation."

Councillor Maureen Chalmers, COSLA’s Community Wellbeing Spokesperson, added: "In balancing the wide range of competing factors, leaders with housing stock will seek to reach agreement with tenants over any increase in rents for the year 2023-24. Councils’ consultative arrangements would normally allow them, subject to approval of local governance structures, to raise rents annually to meet rising costs.

"During these difficult times, as providers of social housing and Gypsy/Traveller pitch or site provision, we intend to keep the rental and fee increases to an average of less than £5 a week across the country."

The Scottish Federation of Housing Associations said the certainty provided by the agreement "will allow SFHA’s members to plan new-build developments and improvement programmes for existing homes as well as continue delivering support services for tenants. It also protects the active and direct role of tenants in rent consultation with their landlord".

Chief executive Sally Thomas commented: "A rent freeze could have removed more than £200m of investment from new and existing homes in the social housing sector, and any restriction would have resulted in reductions in vital support services, with little difference to individual tenants’ incomes.

"We are pleased that Scottish Government has worked closely with the sector, to understand the evidence and avoid unintended consequences of this legislation, and to find a collaborative way forward." 

The Scottish Housing Regulator estimated that those tenants who do pay full rent (unsupported by benefits) would save around £3 per week from a rent freeze.