Housing to 2040: Fairer Scotland Duty

Summary of evidence

The purpose of this section is to summarise the evidence about how housing policy can impact on inequality caused by socio-economic deprivation.

Living in poverty, or on a low income and with little or no wealth restricts housing choices, presents affordability challenges and increases the likelihood of experiencing fuel poverty and the risks of homelessness.

Poverty and wealth

The Poverty and Income Inequality 2016-19 report estimates that 17% of the population (900,000 people each year) were living in relative poverty  before housing costs in 2016-19. During this time, 19% of Scotland's population (1.02 million people each year) were living in relative poverty after housing costs.

Levels of relative child poverty in Scotland, after housing costs, were six percentage points lower than the UK as a whole in 2016-19.  This difference, which developed following the devolution of housing to the Scottish Parliament, has been attributed to a larger proportion of people on low incomes living in the social rented sector and rents being comparably lower across sectors in Scotland. 

A typical household in Scotland had £5,500 in financial wealth after any non-mortgage debt was deducted in 2016-18. However, those in the least wealthy 20% had negative financial wealth - i.e. they were in debt - and 2.9% of households were in unmanageable debt, with lone parent households and younger households more likely to be in this situation.

A third of households in Scotland were financially vulnerable in 2016-18 (34%), meaning that they did not have enough savings to cover basic living costs for three months. Financially vulnerable households were found across all income groups, but mostly at the lower end. The households that were most likely to be financially vulnerable included those who were lone parents, workless, young, with children and those that rented. 

Restricted housing choices

People on low incomes and little or no wealth are likely to be more restricted in their choice of home and housing tenure than those on higher incomes. For example, people on low incomes or who are unemployed and seeking work are more likely to live in the social rented sector . According to the 2019 Scottish Household Survey , 21% of households in the social rented sector did not manage well financially. This was significantly higher than among owner occupier households (3%) and households in the private rented sector (14%) . While not all people living in deprived areas will be on low incomes, they are more likely to be.

Stakeholders who responded to our consultation and engagements told us that a right to an adequate home should be central to Housing to 2040, and that sustaining a strong supply of affordable homes was needed to help end homelessness and tackle child poverty. 

Affordability challenges

Those on low incomes or in precarious employment are also facing affordability challenges in terms of becoming home owners and are limited in their rental options  . While lower housing costs in Scotland have kept poverty rates below other parts of the UK, affordability remains a key challenge for many, be it in terms of purchasing or renting. High house prices and private sector rents remain unaffordable for many, which pushes up demand for social housing. Increasing rents and welfare cuts have meant that many are struggling to meet rising housing costs in both the private and social sectors .

Indebtedness and financial vulnerability can affect people’s ability to pay housing costs and expenses, increasing the risk of eviction and homelessness.

Although mortgage and rent holidays have been available to some during the pandemic, for households on low incomes and those experiencing persistent declines in income, the postponed payments will lead to increased payments in the future, becoming unaffordable for some. This could lead to an increased risk of future eviction and homelessness . 

Stakeholders who responded to our consultation and engagements told us that how affordability is currently understood and defined does not always deliver the best outcomes for people, meaning the right to an adequate home cannot be realised. They told us that increasing the supply of housing was key to improving affordability, as in some areas, there is insufficient supply to meet demand, leading to pressures on social landlords to deliver new homes and keep rents affordable.

Experience of fuel poverty

Households on low incomes are more likely to experience fuel poverty than those on higher incomes. The Scottish House Condition Survey data (published December 2020) indicates that around 613,000 (24.6%) households were classified as living in fuel poverty in 2019, with around 311,000 (12.4%) living in extreme fuel poverty.

Local authority estimates, published in December 2020, showed that island and rural local authorities tended to have both higher fuel poverty rates and extreme fuel poverty rates.

The cost of heating their home, and the cost of maintaining an old home, were key concerns of people attending workshops at the travelling Housing Exhibition.

Increased risk of homelessness

Analysis by Fitzpatrick and Bramley emphatically underlines the centrality of poverty to the generation of homelessness. While a range of health and support needs and behavioural issues, particularly in the teenage years, do significantly contribute to the risks of homelessness in young adulthood, their explanatory power is less than that of poverty.

Monthly management information has been collected to better understand the impact of COVID-19 on homelessness.  This has shown that, during the course of the pandemic, the numbers of homelessness applications received has been consistently lower compared to previous years, although the number of households in temporary accommodation has increased (reaching a peak of 14,397 at the end of August 2020).

Stakeholders emphasised the importance of preventing people becoming homeless by implementing a ‘prevention first’, joined up and multi-agency approach.

People living in deprived areas are less satisfied with their neighbourhoods, have less access to open space and to the internet, experience poorer mental and physical health and are more likely to report experiencing domestic abuse 

People living in areas of multiple deprivation have a higher risk of poverty, fewer opportunities for social mobility and, in places, poor transport links. Poverty drives or compounds inequality which cuts across many areas of life, and many of the worst outcomes are for people living in the most deprived areas . In 2019, 73% of households in the 20% least deprived areas reported that they managed well financially, while only 37% did so in the 20% most deprived areas .

In terms of household tenure, almost half of all households in the social rented sector were in the 20% most deprived areas in Scotland , in comparison with one of every four owner occupied households living in the 20% least deprived areas in Scotland, and private rented households spread out fairly evenly across different areas of deprivation.

Less satisfied with neighbourhood

People living in the 20% most deprived areas are much less likely to rate their neighbourhood as a very good place to live (32% compared to 77% living in the 20% least deprived neighbourhoods)  and are much less likely to report a strong sense of belonging. 

Respondents to our consultation considered access to active modes of travel and safe and easy access to public transport, easy access to services and amenities such as shops, exercise and leisure facilities, education and healthcare were priorities.

Less access to open space

There are differences in terms of access and proximity to an open green or blue (water) space between more and less deprived areas across Scotland . Adults in less deprived areas were more likely to say that they were satisfied with their nearest green or blue space. A larger proportion of those in less deprived areas also used their nearest green or blue space more frequently.

The importance of having access to green and blue space was emphasised during the COVID-19 pandemic. This may have a disproportionate impact on those living in more deprived areas who are less likely to be near to or use their nearest green or blue space as those in less deprived areas.

The importance of shared open spaces was stressed by respondents to our consultation, with many referring to the positive impacts that green and open spaces can have on physical and mental health and wellbeing.

People visiting the travelling Housing Exhibition considered having a garden or access to community green space as the most important quality of a good home.

Less access to the internet

Adults in the most deprived areas and those with lower household income are less likely to use the internet or to have home internet access . In the 20% most deprived areas in Scotland, 82% of households had access to the internet, compared to 96% in the 20% least deprived areas.

21% of adults in social housing did not use the internet (compared to only 5% in Private Rented Sector and 10% of owner occupiers) . Being older or disabled, living in a deprived area or living in social housing were risk factors for exclusion from access to digital services .

Poorer mental and physical health

Both mental and physical health are notably poorer in more deprived areas. In the most deprived areas in Scotland, 33% of adults lived with a limiting condition, while 15% of adults lived with a limiting condition in the least deprived areas . People living in the most deprived areas are also more likely to be in poor health and to have many long-term conditions .

Stakeholders told us that there was a significant shortage of accessible housing (both new and existing) and that this needed to be addressed.

Experience of domestic abuse

People living in more deprived areas – women in particular – are more likely to report experiencing domestic abuse, as are those in the lowest income bracket or living in poverty. There are indications that this may be rising and/or intensifying during the pandemic, and reduced income and/or unemployment could make it more difficult for those experiencing domestic abuse to leave an abusive relationship and increasing domestic abuse may lead some into homelessness.  

People living in rural and island communities may face multiple disadvantages compounding inequalities caused by socio-economic disadvantage

People living in rural and island communities may be disadvantaged in terms of access to public and health services, a higher cost of living, fuel poverty, working part-time or having ‘portfolio’ careers , an ageing population and more complex and expensive transport links. The cost of building new homes and improving the energy efficiency and quality of existing homes in rural and island areas also tends to be higher.

People visiting the travelling Housing Exhibition regarded housing as an important tool to help sustain rural and island communities and encourage young people to stay.

In terms of communities of interest, non-white minority ethnic groups are most likely to experience overcrowding

In 2019 around 51,000 households (2%) lived in overcrowded accommodation under the bedroom standard , which is similar to 2018 . Combined Scottish House Condition Survey (SHCS) data from 2016-2019 demonstrates that a significantly higher proportion of households with a non-white minority ethnic Highest Income Householder (HIH) were overcrowded (7%), compared to households with a white HIH (2.%) .

Lived experience

Evidence of lived experience from those experiencing inequalities of outcome caused by socioeconomic disadvantage was obtained from individuals and organisations as part of Housing to 2040 engagement and consultation. This included, but was not limited to, evidence from Crisis, Shelter Scotland, Citizens Advice Scotland, and Child Poverty Action Group in Scotland. Some evidence included case studies providing examples of lived experience, and others drew on their knowledge of the inequalities caused by socioeconomic disadvantage when suggesting options to address these issues.

The Social Renewal Advisory Board, set up by Scottish Ministers in June 2020 to respond to the COVID-19 pandemic, relied heavily on lived experience when formulating its recommendations for the housing system.

A majority of respondents used their knowledge of poverty and socioeconomic disadvantage to call for a greater investment in and supply of affordable homes, especially in the social rented sector, as a way to reduce inequality. The rising cost of rents and how they are determined was also noted as a driver of poverty, as affordability is not currently clearly defined. It was proposed by a number of respondents that a clearer definition of affordability should be established, linked to income rather than market rates.