Trend report: rent arrears in Scotland

Rental arrears as a percentage of rent due had already risen to 6.3 per cent in 2021-22 from 6.1 per cent in 2020-21 when gross arrears equalled £160.5m.

In this latest year’s figures, the total arrears for registered social landlords (RSLs) increased to 4.5 per cent from 4.2 per cent in 2021-22, while the total for local authorities rose to 9.6 per cent from 8.7 per cent.

Helen Shaw, director of regulation at the Scottish Housing Regulator, stated that she expects current levels of rent arrears to continue for as long as people are facing current cost of living crisis pressures, outlining discretionary payments as a possible short-term form of relief for the issue.

Discretionary payments are provided by the Scottish government through local authorities to those receiving housing benefit or Universal Credit who need help paying their housing costs, predominantly aimed at those affected by the bedroom tax or the benefit cap.

The Scottish government plans to spend up to £84m in discretionary payments in 2023-24, however it is calling on the UK government to scrap the benefit cap, which would ease the number of discretionary payments needed. Payments made by Scottish local authorities has increased annually since 2015-16 from £49m to £79m in 2022-23, with the largest annual increase in 2020-21, rising 15.9 per cent on the previous 12 months.

Although they faced inflation rates of above nine per cent for parts of the year, RSLs and local authorities in Scotland on average increased their weekly rent by 2.6 per cent to give those most vulnerable to falling behind on payments the best possible chance of not doing so.

This was, in part, sanctioned by a moratorium on increases in rent for part of the year between September 2022 and March 2023 by the Scottish regulator.

The knock-on effect of assuming below-inflation rent increases is that social landlords have fewer funds to invest in areas such as repairs and maintenance or endeavours towards meeting energy performance targets, which will have ramifications for years to come. The average weekly rent increase for social landlords in Scotland for 2023-24 is set to be 5.07 per cent.

Despite discretionary payments and minimal rent increases, gross rent arrears have increased £20m this year on the previous figure.