Andrew Watson – Blog – Rural & Islands Landlord Group meeting – 6 December 2024
We held the fifth meeting of the Rural & Islands landlord group on 6 December 2024. This is one of the three standing groups of senior people from Registered Social Landlords we meet with regularly to discuss important and topical issues in social housing in Scotland. We meet with the groups to help us understand the challenges faced by those we regulate.
The group began its discussion around the housing emergency and homelessness. The group members highlighted noticeable differences in the geographical impact of homelessness and noticeable differences in the response by different local authorities. All of the members had significantly increased the proportion of lets they were making to people who were homeless, despite lower turnover in homes, and some had a sense that there was little more they can do to help without building significantly more homes. Members also highlighted the difficulties in getting utility companies to act quickly on renewing / resetting meters when homes are to be relet.
Members welcomed the uplift in the capital funding for the Affordable Housing Supply Programme announced in the Scottish Budget. Most of the members of the group felt that they had capacity to respond to this, although some expressed concern that the general economic conditions may dampen risk appetites to build and that shortages of planning officials is slowing approvals. A decline in small building company private developments is adversely affecting the number of homes social landlords are getting through section 75 agreements. Upcoming, and unplanned for, costs may also limit landlords’ financial capacity to build homes; these costs include higher interest rates, increased insurance premiums, the rise in employer National Insurance Contributions and increased pension deficit contributions. Members felt that there may need to be more sophistication and nuance in how capital grant funding is allocated to ensure it is directed to the areas of greatest need. Members asked that SHR is conscious of this context when it considers its regulatory response to increased development risk. Members also highlighted the limitations on funding for adaptations, and that this was having an adverse impact on other public services, including bed-blocking in the NHS.
The group then discussed the challenges around the continuing uncertainty on the proposed Social Housing Net Zero Standard and how that is impacting on landlords’ ability to assess and plan for the likely cost of achieving the Standard, and hence how much they can plan to allocate to other priorities, including building new homes. Members also expressed frustrations with what they see as disproportionately burdensome bureaucracy around the net zero grant funding.
Members of the group then discussed the pressure on landlords to increase rents to meet increasing costs, while at the same time trying to maintain affordability for their tenants. Members highlighted that there is little in the way of further efficiencies to be had to meet new costs, and that landlords may have to start planning to do less or increase rents. Most of the members of the group ware looking at rent increases for next year of around 1% to 2% above inflation.
Finally, the group touched on the proposed turn off in June 2025 of the Radio Teleswitching Signal (RTS), which switches electricity meters between different tariff rates at different times of the day. A significant number of homes still rely on this, and it remains very unlikely that all homes will have been moved to smart meters before the RTS switch off in June. Members voiced concern about the potential impact of the signal switch off on many tenants whose homes did not have smart meters.