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ARLA Propertymark submits evidence to the Scottish Parliament’s Social Security Committee

Tuesday 19 March 2019

The Committee sought views on its inquiry into Social Security support for Housing in Scotland.

The membership of the Social Security Committee is currently made up of nine cross-party Members of Scottish Parliament (MSPs). The inquiry into Social Security and its impact on rented housing was launched on 5 February 2019.

The Committee is looking into ways that both the Scottish Government and the UK Government can address issues faced by landlord and tenants, particularly in the private rented sector. Local Housing Allowance and Universal Credit housing costs were the main focus of the inquiry.

Launching the Inquiry back in February, Bob Doris MSP, Convenor of the Committee, said: “We constantly hear about pressures on social housing, increasing rates of rent arrears and the need to do more to tackle homelessness. The private rented sector has an important role to play to ease some of these pressures and our committee wishes to establish to what extent the social security system assists or let’s down those in need of private rented accommodation in Scotland. This Committee wants to know what more needs to be done.

We will also be investigating the impact of transferring housing payments for those previously on Housing Benefit into the Universal Credit system. With Citizens Advice Scotland reporting a 40% surge in those seeking help for rent arrears following Universal Credit roll out, our inquiry is timely.

We wish to know what the impact has been on tenants, councils and housing associations; as well as the private rented sector.

Whether you are a tenant or landlord, irrespective of whether it’s the private or socially rented sector, I would urge you to get in touch and tell the committee about your experience of the social security system.”

What did we say?

We made it clear that the increasing size of the private rented sector, and the rise in private rents, are not being taken into account by Local Housing Allowance (LHA) rates. A consequence of this is that the private rented sector is becoming less accessible to low income households. The lack of affordability means that many people are priced out of the areas they live in, as if LHA does not cover their rent, they will be required to pay for the difference.

The rollout of Universal Credit in Scotland has made it difficult for letting agents in finding landlords willing to accept tenants in receipt of the benefit. This can be attributed to the benefit being paid in arrears, which results in the tenant automatically defaulting in their rent unless they can seek funding from elsewhere.

We suggested that more needs to be done to help letting agents and landlords in allocating Universal Credit payments. Currently, payments can only be identified by National Insurance numbers, creating difficulty where letting agents or landlords have many tenants receiving the benefit on their books.

Scottish Housing Choices and Discretionary Housing Payments for Universal Credit were acknowledged as welcome measures. Giving tenants the choice to have their housing costs paid directly to the landlord has helped considerably in the private rented sector, however, we think that tenants should be given this option from the outset of the tenancy. Whilst Discretionary Housing Payments have helped mitigate rent arrears, we are concerned about its longevity, instead more needs to be done to increase LHA.

Administration of Universal Credit can be slow, and delays in applicants receiving payments often mean that landlords feel deterred from accepting these tenants. For this reason, we think that both the UK Government and the Devolved Administrations need to work together to seek ways in which these delays can be remedied.

In forming our response, we surveyed Scottish ARLA Propertymark members, we would like to thank all involved. Read our written submission in full here.

What happens next?

The Call for Views closed on 18 March 2019. The Committee will be taking further evidence from stakeholders throughout March. A report will be published on completion of the inquiry.

What are we doing for you?

In the Member’s Area we have created a Fact Sheet on ‘Universal Credit and Private Rented Housing’ specifically for our Scottish members. Be sure to download it if you haven’t already.

Want to know more? How about booking a place on one of our Scottish Letting Property Management Courses.