Spiralling private rents ‘don’t tell the full story’, warns Govan Law Centre
As rents in Scotland’s private rented sector spiral at double the rate of inflation, Govan Law Centre (GLC) has warned that the story beneath the increase is “stark and deeply worrying” and will lead to more homelessness and poverty.
While official Scottish Government statistics have shown that rents in Glasgow and Edinburgh’s private rented sector (PRS) have risen more than anywhere else in Scotland, GLC said the figures mask unlawful and unfair exploitation of vulnerable tenants.
Casework from the law centre’s Citywide Private Rented Sector service in Glasgow reveals how many private landlords aren’t following the legal protections in place for rent increases.
GLC said some tenants end up paying for the repairs their landlords are obliged by law to carry out.
Many vulnerable tenants are being pushed into financial hardship and misery, and being forced to live below “the breadline” and rely on foodbanks to make ends meet, it added.
In Glasgow, private rents have been hiked up by almost one third between 2010 and 2018 (31.13%) - almost double the rate of inflation (the consumer price index rose by a total of 18.7% over the last eight years).
GLC’s PRS co-ordinator, Wendy Malloy, said: “We can evidence that rent increases being implemented during lets are having a serious impact on household financial sustainability, and increasing the risk of homelessness. A lot of the time these increases are being done without proper legal notice being served and with tenants simply accepting they have to pay.
“We are seeing many households struggle with arrears and we are providing legal advice and representation in these circumstances. We believe this highlights the need to get the message out to people that there is a formal process in place for increasing rents and mechanisms to appeal should the tenant disagree with the proposed increase. Always seek free advice from your local law centre or advice agency.”
Mrs J is a widowed woman with 3 adult children living in private rented property. Mrs J’s has a number of health problems and her own income derives from sickness and disability benefits. Mrs J’s also has an entitlement to housing benefit of £800 per month which was capped at the maximum level of local housing allowance. The client with the assistance of her family were able to pay the difference of £250 towards the contractual rent of £1,050 each month.
Mrs J’s landlord came to the clients home to advise that he was increasing the rent to £1,500 each month and that this was to be effective from the next date rent was due. Govan Law Centre was able to advise that this increase had not been intimated to her in the prescribed form and insufficient notice had been given and also advised this to the landlord. A few months on from this her landlord returned and provided the correct intimation and notice which meant there was to be an increase of £450 per month towards the rent. Mrs J and her family were unable to afford this increase despite significant reductions in their household spending.
As a result of this increase Mrs J and her family had to make an application for homelessness on the basis that their rent was unaffordable and can no longer sustain their tenancy.
GLC’s principal solicitor Mike Dailly said: “Our casework provides cogent evidence of unlawful rent hikes across the City by private landlords. One of our clients is a disabled single parent whose landlord increased her rent by 43% during one month to £1,500 p.m. The housing benefit ‘local housing allowance’ was only £800 p.m. Other clients already struggling to make up housing benefit shortfalls have been trying to cope with rent increases of around £100 p.m. Tenants can apply for discretionary housing payments to help, but these are generally temporary. In practice, many tenants are meeting rent hikes by using their social security money for food and heating costs.
“There is clearly a need for greater public awareness that rent hikes require formal written notice and must comply with certain legal procedures to be valid. There is always a right to appeal, although the law on market rents tends to favour private landlords. Govan Law Centre believes the private rented sector remains largely unregulated and in practice is too often a free-for-all for landlords out to squeeze as much money as they can from a tenant with limited options.
“For low income tenants there is no consumer choice or genuine market competition in this sector. We believe there is a case for national regulation - there is no national regulation at present unlike for the social rented sector. There is a need for a ‘living rent’ in this dysfunctional market, and strengthening the rights of private sector tenants in Scotland. The present system is unsustainable and is costing the taxpayer in terms of the social, human, and medical problems it creates.”