Housing affordability study: Findings report

Executive Summary

In July 2023, the Scottish Government commissioned social research agency The Lines Between to deliver a qualitative research study exploring experiences and understanding of housing affordability among social housing and private rental tenants in Scotland. The aims of the research were to:

• find out what ‘affordable housing’ or ‘housing affordability’ means to tenants;
• understand their concept of what constitutes a decent standard of living in relation to housing costs;
• explore experiences of housing unaffordability and housing stress; and
• gather tenants’ views on definitions of housing affordability to inform recommendations to Ministers.

A total of 24 participants took part in the study; the sample was designed to ensure adequate representation across several different categories, including: age; gender; local authority; rurality; and household and tenancy type. Data collection involved online focus groups and one-to-one online/telephone interviews exploring: tenants’ experiences of housing stress and unaffordability; housing aspirations; views on what constitutes a ‘decent’ standard of living; and views on different approaches to measuring and defining housing affordability.

Through engagement with participants, it was clear that many are struggling with housing costs; in most cases, core bills are paid, but sacrifices are being made. Long term financial risks were also an issue, with concerns that tenants may be able to cover their immediate housing costs and other essential outgoings, but have little or nothing left to save for the future, or to protect against potential adversity such as unexpected bills, redundancy or ill health.

The subjectivity and fluidity of housing affordability were emphasised; participants viewed particular situations as affordable for some households but not others, depending on their life stage, circumstances and geographic location.

There was no clear consensus on the best measure or definition of housing affordability; participants described both positives and negatives of cost-to-income ratios, minimum income standards and residual income measures. Some had their own suggestions for how best to define housing affordability, such as: linking housing affordability to minimum wage; linking housing costs to profits to ensure landlords charge a reasonable rent; and a tiered or means-tested approach that recognises that different households require different cost-to-income ratios depending on their circumstances.

Ultimately, participants advised that a measure or definition of housing affordability must:

• Be clear, specific and relative to tenants’ everyday lives and finances. Participants generally preferred measures that can be applied to and measured against their own housing costs and financial circumstances, as opposed to vague or less precise definitions.
• Reflect the realities of the rental market. Tenants described some of the suggested housing affordability measures as aspirational or ‘only working in theory’. For example, they explained that the Scottish Government could set an official affordable housing cost-to-income ratio of 25%, but there may not be enough suitable properties on the market which meet this price point for renters.
• Emphasise fairness and dignity for tenants. Some felt it was important that the definition reflects the idea of tenants receiving ‘a fair deal’; i.e. being treated respectfully, living in housing with adequate standards, and not being exploited by landlords. This includes having enough money after rent to live a fulfilled life, with capacity to save for the future.
• Consider what is realistic, affordable and allows for ‘future-proofing’, especially for people living on benefits or the minimum or living wage.