Fair Price for Affordable Housing?

Fair Price for Affordable Housing?

25th March 2024

by Aoife Deery, CAS housing spokesperson.

This article was first published in The Herald on 23 March 2024.

What is affordability? To me it’s a sense of knowing if I can pay for something that doesn’t compromise being able to pay for other essential things, or get into debt. There’s no doubt that affordability will mean different things to different people, taking into account your income and the relative importance of what you want to buy compared to other things.  

But what does affordability mean in the context of housing? This has long been a question that not only policymakers have grappled with but also a lot of the public in their daily lives. There’s been a lot of focus from governments on trying to provide affordable housing but there is often not enough of it to go around, so many people’s main housing option is to rent privately. Recent Scottish Government statistics show that average private rents for 2 bedroom properties (the most common size) in Scotland increased by an estimated 14.3% between 2022 and 2023, reaching £841 last year.  

In areas like Greater Glasgow and Lothian, they rose even faster – 22.3% and 18.4% respectively. These figures are based on advertised rents. Critically, we don’t have data on what people actually pay.  

While rent caps have tried to limit large increases for existing tenants, we all know that rents generally go up and very rarely come down. Coupled with the increasing costs of everyday goods and the price of energy, we know from the cases seen by our CAB network that even if rents remain stable, people are being squeezed in other ways.  

Over the past couple of years, the Scottish Government has been trying to develop a common, workable definition of affordability as part of its ‘Housing to 2040’ work. They want everyone to have a safe, good quality and affordable home. But in order to do this, some hard work has to be done to really understand what is affordable – not just for tenants but taking landlords’ necessary costs into account too. A Scottish Government working group is soon to publish its long-awaited recommendations based on research about what this definition should look like. 

Meanwhile, we’ve done our own investigation. In a survey we commissioned Yougov to run in January, we asked Scottish people what affordability meant to them, and if they recognised any of the common housing affordability definitions used globally. The results were fascinating: most people thought that a person on minimum wage should be able to comfortably afford their housing costs, with most saying that no more than 30% of a person’s salary should be spent on housing costs. People also felt that these housing costs should include council tax and utilities too, rather than rent alone. 

The reality is that more and more people are coming to us struggling to access or afford private rents, and if they can’t, homelessness is often the outcome.  

So what can we do to help people rent affordably? Defining affordability is a good start, but other interventions will be needed. CAS supports a form of rent control in Scotland, but it must be designed fairly with the involvement of both tenants and landlords.  

And the Government must continue to base its policies on evidence and must also be ambitious in its vision, as everyone in Scotland deserves an affordable place to call home.