Rent Arrears For Council Houses Up 14% In Scotland In One Year
16th October 2019
The total amount of rent arrears on all council properties in Scotland has increased by 14% in a year as the number of council tenants in arrears increased by around 3% according to official figures.
Scottish Council Housing Income and Expenditure statistics for the year 2018/2019, published by Scotland's Chief Statistician, show that rent arrears on all council properties totalled £74 million in March 2019, up £9m (14.0%) on last year. This increase represents 6.2% of the total income from council properties.
During the same period, the number of council tenants in arrears has increased by around 2,940 tenants or 3% to 102,702 and the number of former tenants in arrears decreased by around 2,180 tenants or 7.0% to around 30,400.
In 2018-19 budgets, councils wrote off nearly £10.8m of outstanding rent as unrecoverable, compared to £10.1m in the previous year.
Elsewhere, income from council houses was £1.21 billion in 2018-19. Of this, around £656m was spent on housing management and maintenance and £277m on loan charges. The surplus of £234m was invested in housing capital projects, including new build council houses and enhancing existing stock.
Provisional estimates show councils invested £738m in housing capital projects including £286m on new council houses and £389m on enhancement to existing council houses.
There were 311,240 council houses in Scotland in March 2019, which is an increase of around 1,100 houses since March 2018. This is forecast to increase by 1,300 by March 2020.
Other key findings include:
Housing management and maintenance
The average amount spent on the day-to-day management and maintenance of council housing was £2,080 per house in 2018-19.
Council rents
In 2018-19 average council rents ranged from £60 per week in Moray to £97 per week in the City of Edinburgh. Tenants paid an average of £72 per week to rent their homes in 2018-19, an increase of just over £2.00 or 3% per week since 2017-18.
Income from Housing Benefit
In 2018-19, rent rebate subsidy for council house tenants from Housing Benefit was around £519m or 45% of total income from standard rents. This has decreased each year since 2014-15 when it was 57%. In 2018-19 rent rebate subsidy as a proportion of standard rents varied from 30% in East Lothian and the Shetland Islands to 60% in Renfrewshire.
Housing debt
Councils spent £277m on HRA loan charges: interest, capital repayment and loan fund expenses, in 2018-19. Total council housing debt stood at £3.8bn in 2018-19 an increase of around £255m or 6.0% on the previous year. Councils borrowed to improve and build council houses. Council housing debt is forecast to rise to £4.3bn up £480m in 2019-20.
Capital expenditure
Councils' provisional housing capital expenditure was estimated to be £738m in 2018-19. This included just over £389m on improvements to existing council houses and £286m on new council houses. This expenditure is in addition to the day-to-day maintenance referred to above.
See https://www.scottishhousingnews.com/article/council-housing-rent-arrears-up-14-in-a-year
The Report
Housing Revenue Account (HRA) statistics: Scottish local authority housing income and expenditure 2018-2019 (actuals) and 2019-2020 (estimates)
This bulletin presents statistics on Local Authority housing income and expenditure in Scotland from their Housing Revenue Accounts (HRAs)statistical returns.
Key Points
Balance of HRA housing income and expendiure
Total HRA housing income was £1.21bn in 2018-19, of which around £656m was spent on the day-to-day management and maintenance of housing and around £277m on loan charges.
This left a surplus of around £234m, of which was transferred to the council's housing capital expenditure account and then invested in new build council houses and improvement to existing houses.
In 2018-19, rent rebate subsidy for council house tenants from Housing Benefit was £519m or 45% of total income from standard rents. This has decreased each year since 2014-15 when it was 57%.
Scottish council housing stock and rents
There were 311,240 council houses in Scotland as at March 2019. This is an increase of around 1,100 houses since March 2018. The number is forecast to rise to 312,540 (up 1,300) by March 2020. Average rent per house was £72 per week in 2018-19, up by just over £2.00 on 2017-18. In 2018-19 average rents ranged from £60 per week in Moray to £97 in the City of Edinburgh.
Council rents have increased by around 16% (£10) since 2008-09 in real terms i.e. over and above general inflation.
Management and maintenance of stock
Average expenditure on management and maintenance was £2,080 per house in 2018-19. Within this supervision and management costs were £810 per house, whilst repairs & maintenance costs were £1,270 per house.
Empty properties and rent arrears
Councils lost almost £20m due to all empty properties (void losses) on all properties in 2018-19 or 1.7% of the Standard Rental Income on these properties, about the same in the last two years but below the peak of 3.7% in 2002-03.
As at March 2019, rent arrears on all council properties was £74m, up around £9.0m (14.0%) on last year, representing 6.2% of Standard Rental Income from these dwellings. These arrears have been rising steadily year on year since March 2013.
During the same period, the number of council tenants in arrears has increased by around 2,940 tenants to 102,702 and the number of former tenants in arrears decrease by 2,180 to 30,400 as at March 2019.
Housing Debt
In 2018-19 councils spent around £277m on loan charges to the HRA (which includes interest, capital repayment and loan fund expenses), the same as in the previous year.
Total estimated council housing debt stood at £3.8bn in 2018-19 an increase of £225m (6%) on the previous year. Councils borrowed this money to improve and build council houses.
Read the full report at -
https://www.gov.scot/publications/housing-revenue-account-hra-statistics-scottish-local-authority-housing-income-expenditure-2018-19-actuals-2019-20-estimates/pages/2/
