The economic impact of the pandemic has clearly influenced Scottish landlords' decision to limit rent increases


24 September 2021

The economic impact of the pandemic has clearly influenced Scottish landlords' decision to limit rent increases

Last month we published our eighth annual National Report on landlords’ performance in achieving the standards and outcomes of the Scottish Social Housing Charter. It is safe to say that 2020/21 was a year like no other.

The national lockdown in March last year in response to the escalating coronavirus pandemic had an immediate impact on social landlords’ ability to deliver services as normal. Landlords had to operate within changing levels of restrictions throughout 2020/21.

Unsurprisingly, this has had an impact on the performance of landlords, and so on the annual performance data they reported to us. While it is not possible to be definite that any and every dip in performance is in whole or in part a direct consequence of the pandemic, it is unquestionably the most significant contextual factor in assessing performance in the last year.

This year’s National Report has a different focus and look to those for previous years to reflect that unique and challenging context that landlords operated in during 2020/21.

The headline finding is that nine out of 10 tenants remain satisfied with the quality of the homes and services their landlord provides.

Average tenant satisfaction with opportunities to participate has remained steady at 87%, and tenant satisfaction with being kept informed stayed at 92% having increased steadily since 2014/15.

Average weekly rents went up by 2.7% to £83.70 and the percentage of tenants satisfied that their rent is good value for money dropped slightly to 83% from 84%. Landlords planned to increase rents by 1.2%, down from 2.5% in the previous year.

The pandemic and the resulting economic impact on tenants have clearly had an influence on landlords’ decisions on rent increases. This is understandable in the context of the pandemic, and can be viewed as positive for tenants who may be struggling financially.

However, landlords will need a comprehensive review of their business plans to ensure they factor in the consequences of changes in planned rent increases and the wider impacts of the pandemic on their businesses.

Landlords took longer to complete emergency repairs with the response time up to 4.2 hours from 3.6 hours in the previous year. This is still a good performance in the context of the restrictions landlords operated under, especially during the first lockdown.

Most landlords had to curtail their planned investment programmes, including those to build new homes and to achieve the Scottish Housing Quality Standard and the Energy Efficiency Standard in Social Housing.

Landlords continue to build back the range of services they provide. Our National Report shows some of the scale of the recovery that is required: landlords lost an aggregate of nearly £36m in rent through homes being empty, an increase of more than 53% on the previous year; they let 23% fewer homes than in the previous year; and more than 13,000 households were living in temporary accommodation on 31 March 2021, up 12% on the previous year.

On top of the recovery from the pandemic, landlords will have to respond to the climate emergency and what might emerge from the UN Climate Change Conference of the Parties (COP26).

They also face the drive to decarbonise heating in homes, growing problems in supply chains for materials and labour, potential increases in pension deficits, increasing incidents of cyber attacks and the need for robust cyber security, and a new emerging political landscape for housing in Scotland. And that’s not an exhaustive list of the challenges ahead.

Landlords have faced severe difficulties as a result of COVID-19 and have a range of challenges to contend with as they recover out of the pandemic. It is very likely that the impact of the pandemic will continue to be felt by social landlords during 2021/22 and will be reflected in the performance that landlords will report in the next Annual Return on the Charter.

We will continue to refine our approach to ensure that we focus on the most critical risks and challenges that landlords face and to reflect the context they operate in.

The coming period feels like it may be the most testing that social landlords have had to face. However, social landlords in Scotland have weathered many storms in the years in which they have been building homes and sustaining communities.

Good governance builds and sustains resilience, it keeps organisations safe and it helps them to evolve to respond to an increasingly complex, volatile and uncertain world. It will also be crucial in helping social landlords protect the legacy of their work over the past decades.

Michael Cameron, chief executive, Scottish Housing Regulator