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Local Government, Housing and Planning Committee 05 December 2023

05 Dec 2023 · S6 · Local Government, Housing and Planning Committee

Item of business

Scottish Housing Regulator: “Annual Report and Accounts 2022-23”

George Walker Watch on SPTV

I have some information to give you. I probably do not have specific numbers to hand, but I can provide you with more data. What I am about to say is maybe more high level, if I can put it that way. On coming back from the pandemic, I suppose that the place to start is with the good news that we hear from landlords. In many cases, they are back to providing pretty much the full range of services that they were providing pre-pandemic. That is a good thing; it might even be surprising, given the cost challenges that they have been hit with. Are those things perfect? No—there are gaps here and there, but it is fair to say that landlords have stepped up to that challenge. Of course, they have been hit not only by the pandemic but by the dual challenges of the global impacts and inflation, which we have touched on. I will come on to the rent question in a second, but I must first highlight that there is a struggle related to the fact that there is lower turnover of homes now than there was pre-pandemic. It is quite significant that turnover has not come back to pre-pandemic levels, and that situation plays through the system. Around 1,700 fewer homes became empty during the past 12 months—that is a big number—but it is nearly 5,000 fewer than in 2019-2020. That is a significant slowing of turnover, if you like, of social housing, which is impacting on landlords and tenants. You asked about empty homes and so on. Michael Cameron touched on the fact that landlords were struggling to re-let rapidly enough. I will give you some specifics on that. In 2019, it took about 32 days to re-let an empty property. Today, it is taking 56 days. That is a gap. Michael touched on some of the reasons for that increase: there are, for example, issues around availability and cost of services to deliver re-letting. I will draw your attention to the fact that, of course, such delays mean that landlords lose rent from those empty homes, even in re-letting. By our estimates, there is between £38 million and £39 million—£38.7 million, to be exact—of lost rent due to that delay. You can see where some of the challenges are. What are landlords doing to alleviate that? It is fair to say that landlords are making significant efforts. The evidence says that, over the past couple of years, rents have increased at below the rate of inflation. I will give you some numbers on that. Consumer prices index inflation was averaging 8.7 per cent, the average rent increase by social landlords was 5.1 per cent and the median was 5 per cent. It was reasonably far behind what CPI inflation was showing. I make it clear that averages and medians can mislead. There was a range of RSLs’ increases, from zero per cent—some had no rent increases—up to as high as 8 per cent. However, that 8 per cent was still behind the 8.7 per cent average inflation at the time. That gives members a sense of the scale of the rent increases that RSLs have been tackling and what they have been trying to do against the current backdrop. The final thing that I want to draw your attention to, because it is important, is the fact that, during the pandemic in particular, we had concerns around gas safety inspections and access to homes. You can imagine that, during the pandemic, access to homes was difficult for landlords and worrying for tenants. There was a gap in some landlords getting that done. However, I am pleased to say that, post-pandemic, social landlords are back to carrying out those inspections and have, in the past year, completed 99.8 per cent of gas safety inspections. That is a significant recovery from where they were when they struggled with access during the pandemic. Going back to your question, I say that I hope that the rent increase numbers give you a flavour of the situation. We will have a look at what other specific data we can give you on numbers, landlords and so on, because we have all the data on the suite of what landlords have been doing with rents. I am sure that we can provide you with that.

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Local Government, Housing and Planning Committee 05 December 2023

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