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Scotland's social landlords say £5 million in lost rent 'a direct result' of the bedroom tax

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Scotland's social landlords say £5 million in lost rent 'a direct result' of the bedroom tax

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Published by Jon Land for 24dash.com in Housing and also in Central Government, Local Government

Scotland's social landlords say 5 million in lost rent 'a direct result' of the bedroom tax Scotland's social landlords say 5 million in lost rent 'a direct result' of the bedroom tax

Scottish councils and housing associations have found themselves £5 million out of pocket due to the bedroom tax, according to figures published today.

Research by the Scottish Housing Regulator, covering the first six months of the controversial under-occupation penalty, showed that the total rent arrears for all responding social landlords was £73 million at the end of September 2013, which is 4.43% of the total rental income due for 2013-14, up from 3.89% in September 2011 and 3.82% in September 2012.

The regulator’s research was based on feedback from more than 80% of social landlords in Scotland.

Earlier this week the Scottish government announced a further £15 million in funding to help mitigate the impact of the bedroom tax. However, it requires UK government approval before it can be distributed.

Iain Muirhead, the regulator’s director of strategy and communications, said: “Our role is to protect tenants’ interests. To be successful and deliver for their tenants, social landlords need to be financially healthy. This research helps us to understand the challenges landlords face.

"The picture is complex, and some of the emerging patterns are subtle rather than stark. Arrears fluctuate seasonally, and other evidence suggests an increased use of discretionary housing payments to mitigate arrears. Nevertheless, our research indicates that many landlords believe that welfare reform is beginning to have a significant impact on their arrears levels.”

The research examined landlords’ perceptions of the impact of the welfare reform changes. Almost half of responding local authority landlords and almost a fifth of housing associations estimated that more than 10% of their arrears at September 2013 were attributable directly to the housing benefit reductions introduced in April 2013.

Just over three quarters of responding landlords told the regulator they could identify the monetary value of arrears at September 2013 arising directly from the reductions. The total cash value of these arrears reported by this group was £4.86 million.

The research found a small increase in the level of rent arrears as a percentage of rental income due to registered social landlords (RSLs) between March and September 2013. This increase contrasts with a slight decrease in RSL arrears over the same period in each of the previous two financial years.

The research also looked at changes at individual RSL level. Just over half of responding RSLs saw an improvement in their percentage arrears position in the three months to September, whereas one third saw an improvement between March and June.

The regulator is now launching the third survey, which will seek feedback from landlords on the position to the end of December 2013.

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