UK welfare cuts ‘having major impact on rent arrears’
The Impact of UK Welfare Policy on Housing report highlights the negative effect of Universal Credit on both tenants and landlords, due to the major increase in rent arrears. In East Lothian for example, 72% of social housing tenants claiming Universal Credit were in arrears, compared to 30% of all tenants.
In addition, the UK government’s freeze on local housing allowance rates – a benefit paid to private rental tenants – has also substantially limited households ability to afford rent on properties.
The Scottish Government funds the full mitigation of the ‘bedroom tax’, which would otherwise affect over 70,000 individuals who would lose an average of around £650 a year, as well as providing additional funding for direct mitigation of welfare reforms, wider direct support for those on low incomes and advice and other services.
Housing minister Kevin Stewart said: “Almost half a million Scottish households receive some form of financial support for their housing. 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.
“We are doing all we can, with the powers we have to protect those on low incomes from these devastating UK government cuts - spending more than £125 million this year alone to do so. This includes £62m to fully mitigate the ‘bedroom tax’, help for those impacted by the freeze in local housing allowance, as well as providing support for low-income households.
“This report builds on previously published evidence of the undue pressure on people that UK government changes to our welfare system are causing, including housing. We want to ensure everyone has access to a safe, warm place to call home – as part of that, the UK government must urgently change course.”
The Impact of UK Welfare Policy on Housing report is the third in a series of studies looking at the impact of UK welfare reforms. The first report focused on the impact on families, and the second report on the impact on disabled people.
Graeme Brown, director of Shelter Scotland, said: “Although shocking, this report’s findings come as no surprise to Shelter Scotland. Our frontline advisors deal with many of these issues day-in, day-out. Last year nearly half of the 21,000 people who came to us for help were private renters - far too many were struggling to afford to keep a roof over their head.
“Scotland faces a major crisis with housing-related poverty – where those on the lowest incomes are spending an increasingly higher percentage of their earnings on housing costs like rent and utility bills and they often need help to make ends meet.
“Last year Shelter Scotland revealed there has been a 24% rise in social sector evictions in Scotland in recent years, with much of this being attributed to the impact of harsh welfare reforms and rising rent arrears – including Universal Credit.”
Graeme Brown added: “We are also deeply concerned about the points referenced in this report suggesting that the impact of welfare reforms may mean private landlords do not wish to rent to those in receipt of the benefits they are entitled to. No one should be discriminated against in this way.
“We support the call for the UK government to unfreeze Local Housing Allowance rates to ensure housing benefit properly meets the needs of private renters in Scotland.”