Frozen Out Scotland
CIH policy and practice officer Jennifer Galbraith examines the implications of the LHA freeze for Scotland.
Affordability is an ongoing priority for our sector, with the recognition that the right type of housing and housing support has a large role to play in alleviating poverty. Yet, published last week, CIH Frozen Out report and Frozen Out blog document that private renters face significant hardship as a result of changes in benefits, particularly in relation to housing affordability.
Within the Private Rented Sector (PRS), tenants can receive help to cover their housing costs through local housing allowance (LHA) (or the housing element of universal credit for those that have migrated) up to a maximum amount depending on the size of home that they need. LHA rates are based on local rents and previously the benchmark was to provide access to 50 percent of privately rented homes in each local housing market. However, this was reduced to 30 percent by the Coalition Government and the uprating of LHA rates has been frozen since April 2016.
While the benefit freeze is set to end in April 2020, the Frozen Out report highlights that there is no commitment to reverse the years of losses. Within the final year of the benefits freeze, LHA rates in the majority of areas across Scotland are significantly lower than what is needed to cover rent on at least 30 percent of homes. This means it is increasingly hard for private renters to access homes where the rent is within the LHA rate, increasing the risk of homelessness and destitution.
In Scotland we are able to see how affordable two-bedroom housing is for those receiving LHA. Using data from the Scotland affordability analysis, the Aberdeen and Shire area has the highest proportion of affordable two-bedroom housing at 44%. While this figure seems relatively high, the flipside means that over half of the two-bed private housing stock within Aberdeen and Shire is unaffordable.
Unfortunately, Aberdeen and Shire is a positive outlier in Scotland, and affordability numbers appear starker when considering Scotland as a whole. For instance, half of the 18 broad rental market areas (BRMAs) within Scotland have between 21 percent and 34 percent affordability in terms of two-bed private accommodation, and just under one quarter between 12 percent and 17 percent.
Specifically concentrated within the Central Belt of Scotland, affordability decreases even further with East Dunbartonshire, Greater Glasgow, Lothian and West Lothian ranging from 3 percent to 7 percent affordability in private two-bed accommodation.
While only relating to two-bed housing, these figures paint an unpleasant picture. The removal of the freeze next year is welcome but without an appropriate uprating, affordable rented homes in the PRS will remain out of reach for many.
The increase in supply of affordable housing in recent years has been welcome but the Scottish Government programme cannot fully mitigate the impact of the UK Government welfare reform measures.
And while we need more social housing, we also need a welfare system that recognises the true cost of housing and supports tenants to live in safe, affordable homes irrespective of tenure. As the report notes, we are some way off this.