The risk and impact of COVID-19 has “a disproportionate impact on people at the sharp end of social, income and health inequalities”. National Records of Scotland states that death from COVID-19 is 2.3 times higher in the most deprived areas. This blog looks at the impact of COVID-19 on the rented and social housing sector.
Funding
The Scottish Government announced £350 million of Communities funding on 18 March 2020 This includes an additional £45millon for the Scottish Welfare Fund, and £70million for a Food Fund, as well as monies for Wellbeing. These funds have since been opened for applications.
This funding included the Third Sector Resilience Fund, worth £20 million, launched on 25 March. This fund provides emergency grants and loans to charities, voluntary organisations, community groups and social enterprises.
Several councils, including the Highland Council, say there will be a budget gap to deal with, due to the additional monies required to deal with COVID-19, which may have a long term impact on future service provision. Homes for Scotland sees major barriers to housing development if there is a lack of funding for affordable housing or infrastructure programmes for new development.
Homelessness
The Coronavirus (Scotland) Bill 2020 increased eviction notice periods, depending on the grounds used, for up to six months for private and social tenants. This protects private and social tenants from eviction and provides security to households facing financial hardship in the coming months.
Local authorities and third sector partners have ensured hundreds of people previously sleeping rough or in unsuitable accommodation across Scotland, including those with no recourse to public funds who are at risk of destitution, are now supported in hotel rooms, short term lets and other temporary accommodation. Funding has been provided by the Scottish Government to ensure that rough sleepers can be accommodated in hotels or other accommodation. This ensures they can self-isolate which can be difficult in night shelters.
There is, at the time of writing, lack of clarity around what will happen once the emergency provisions end. Will properties “flip” (transfer from temporary to permanent lets) and be allocated to the current inhabitants?
However, Matt Downie, from CRISIS and Maggie Brunjes, from Homeless Network Scotland, have stated that the economic impact of COVID-19 has increased homelessness. According to them, rough sleeping conditions have worsened. There are less food handouts from shops and members of the public and many homeless people are now getting no income from begging.
The virus has meant that services have worked together, providing certainty for clients. Maggie Brunjes says that this should remain the norm to ensure the best services for clients.
Whilst the funding initiatives and partnership working have reduced rough sleeping in Scotland, is there evidence to suggest that this has been eradicated? Maggie Brunjes suggests that there are still rough sleepers in Scotland’s cities.
The COVID-19 crisis has meant that the Homeless Persons (Unsuitable Accommodation) (Scotland) Order 2020 came into force on 6 May 2020, earlier than anticipated. This amends the Homeless Persons (Unsuitable Accommodation) (Scotland) Amendment Order 2017 and requires local authorities to ensure any homeless person does not spend more than seven days in Unsuitable Accommodation (i.e. Bed and Breakfast accommodation). However, the 2020 Order allows local authorities to potentially breach the order, if needed, until 30 September 2020, to ensure households are housed. This means that homeless people may be in bed and breakfast accommodation for longer than they should be.
The Homelessness etc. (Scotland) Act 2003 (Commencement No. 4) Order 2019 included a requirement that Scottish Minsters publish a statement, by 7 November 2020, to take forward a new power to modify “local connection”. This is the requirement that a household must have a connection to the area in which they are applying for housing, for example employment or immediate family living there. It required that Ministers consult on the statement. This has been postponed as local authorities and homelessness organisations and the Scottish Government are to support the response to COVID-19 and so have limited capacity for consultation.
Students
The Coronavirus (Scotland) (No.2) Bill says that students residing in halls of residence or purpose-built student accommodation will be able to terminate their current occupancy agreements early by providing seven days’ notice.
The provisions in the Bill will also enable students at the start of the next academic term to give 28 days’ notice on any tenancy contract they have entered into during the six month period the emergency legislation is in force.
Landlords and Home Owners
The UK Government, in conjunction with the Financial Conduct Authority, has put in place a system which allows homeowners, including landlords, to take a three-month mortgage payment holiday. However, there is no requirement for landlords to pass on the money saved to tenants, through rent holidays or rent reductions. The Scottish Government have, from 5 May 2020, provided a fund for landlords whose tenants may be unable to pay the rent. The aim of the fund to enable landlords to support tenants and minimise financial hardship that might be caused by the extended notice periods outlined in The Coronavirus (Scotland) Bill 2020. The Scottish Association of Landlords points out that the loans are only available to landlords with up to five properties. They have suggested that the loans be made available to all landlords.
Property market
There has been a decrease in property sales and the number of homes coming onto the market since March 2020. The closure of the property registers to paper-based applications for registration by Registers of Scotland (ROS) on 24 March significantly affected the completion of property transactions. The Scottish Government released guidance on 31 March 2020 which stated that property moves should be delayed until after the social distancing measures have been lifted. There is also an exit of landlords from the short-term rental sector as demand has fallen.
Social housing
If the Coronavirus (Scotland) (No.2) Bill comes into force in its current form, Registered Social Landlords (RSLs) will have nine months to submit their accounts, rather than six months. This is due to the pressures that housing associations are facing dealing with COVID-19 issues.
However, housing associations may lose rental income from tenants who usually pay in cash and cannot currently use phone or online methods. New-build properties which will not either be completed or handed over this year may also result in a reduction in expected income for Housing Associations.
Some social landlords, including local authorities and housing associations, have suspended allocations and mutual exchanges. This means that properties are not being allocated to people on housing registers as normal, nor are tenants able to swap properties with one another (Mutual Exchanges). However, delays to housing allocations risk the safety of vulnerable groups, such as those with mobility or health issues and may create a backlog within the housing sector.
Audit Scotland expressed concern that the Scottish Government may not meet their ambitious target of 50,000 affordable homes, of which 35,000 were to be for social rent, therefore reducing the amount of accommodation available. This reduces the amount of income social housing providers may receive from tenants.
Unanswered questions
There are many questions about how the housing sector may develop after lockdown is lifted. With the need for increased local authority spending to cope with COVID-19, it seems likely that budgets will have to be re-evaluated. This may have an impact on the implementation of Housing First and Rapid Rehousing plans. These plans work to house the most vulnerable clients with support and, where possible, reduce the need for temporary accommodation through rapidly rehousing homeless clients. Additionally, the pausing of the Affordable Housing Supply Programme, due to the lack of house building taking place, reduces the quantity of accommodation available which may delay allocation of housing to tenants.
The additional measures brought in by the Scottish Government, including funding, are temporary. What will happen when the funding ends? Will the rough sleepers currently housed in hotels be returned to the streets or placed in accommodation which may put them at risk, such as hostels? Will there be the end to end support plans in place for these vulnerable people to enable them to move on to more suitable accommodation with the requisite support?
The Coronavirus (Scotland) Bill 2020 postponed evictions for 6 months (3 months for antisocial behaviour issues). Additionally, the First Tier Tribunal (Housing and Property Chamber) is closed until at least 28 May and is currently only dealing with urgent or time-critical matters so landlords cannot make any applications for eviction. Does this mean there will be a spike in eviction applications once the tribunal re-opens for business and the eviction notice periods are up? Is there a possibility of an increase in Housing Advice or Homelessness cases for local authority housing departments and an increased demand for social housing?
We will have to wait and see.
Alex Marks
SPICe Researcher