Benefits system blamed for 'unaffordable' Scottish rental sector

by Gary Whittaker

The cost of renting a home privately in much of Scotland has become unaffordable for benefit claimants, according to a new Scottish government report.

Ministers in the SNP administration at Holyrood claim the Westminster government has created the crisis through its benefit reforms, with universal credit being blamed for an increase in the number of cases of rent arrears. 

Around one in five of the 2.4 million households in Scotland get some form of financial help from the state with their housing costs. 

An example given by the Scottish government was the East Lothian region, where 72 per cent of tenants who claim housing benefit are in arrears, compared to 30 per cent of all tenants.

It also said that private rent had become "completely unaffordable in some areas," due to the freeze in the local housing allowance, with the help on offer to rent a one-bedroom flat in Edinburgh only being enough in five per cent of cases, not the 30 per cent estimated at Westminster.

Housing minister Kevin Stewart commented: "It is clear that UK government welfare cuts are having a devastating impact, with money taken from the pockets of people across the country, pushing them into crisis and debt."

Landlords and letting agents in Scotland may be given considerable food for thought by the situation, with the report warning that many landlords could choose to evict tenants over their arrears and then decide not to take on benefit claimants in the future.

Some may indeed go down this route, but the Westminster government noted there are alternatives, with a spokesman stating that landlords can apply to have rent paid directly to them in cases where tenants are in arrears. 

He also noted that the Scottish government now has the fiscal autonomy to raise more funds to add extra benefits.

Landlords may benefit from movement in the latter case in future Holyrood Budgets. For now, however, direct payment may be the best way forward and a practical alternative to serving eviction notices as the new benefits system beds in. 

Find out more about letting agency softwareADNFCR-1064-ID-801846708-ADNFCR

14-May-18General Lettings News