Inequality grows as economic boom leaves many locals priced out of rental market

Economic inequality is growing in Shetland, with increasing numbers hit by social and financial difficulties – as housing ranks highly among many people’s concerns.

The industrial boom brought by Total’s gas plant, far from bringing ‘trickle down benefits’ to the whole community, is contributing to these problems, with the cost of private rental accommodation now rising out of the reach of local people.

That is the view of at least one councillor, and it is backed up by the experience of the Shetland branch of the Citizens Advice Bureau (CAB), which this week received a major funding boost from the National Lottery.

Such is the extent and severity of this issue that the council may be forced to dip into its reserves and begin to build more houses, to ensure the islands are not faced with an exodus of young people.

CAB’s manager Sylvia Jamieson confirmed the bureau was experi­encing an increase in enquiries about a whole range of issues, from benefit problems to debt.

However, one of the most notable changes has been a rise in the number of queries about housing. There has been, she said “a lot of enquiries from both landlords and tenants around being evicted or evicting tenants, questions around deposits, that kind of thing.”

She said the past four to six weeks had seen a particular leap in numbers. “It may be a blip but the blip is not showing any signs of stopping,” she said. “We’re going to monitor it over the next few months and see what happens.”

The difficulties are caused, in part, by the steady pressure on the housing stock owned by the council and Hjaltland Housing Association, because of a limited supply of properties and a waiting list of hundreds. However, the problems are also due to steeply rising rents, both in Lerwick and beyond, which are being attributed to the demand from Total workers and executives, who, it seems, are willing to pay whatever is asked.

The high prices are not confined to the town. With a two-bedroom house in the North Mainland recently advertised for £2,000 per month, and others rumoured to be going for considerably more, locals are being priced out of the market.

Ms Jamieson confirmed that she “suspects” demand due to the gas plant development may be at the root of the problem.

“Landlords are aware that … they can get better rent elsewhere,” she said. And in some cases “bullying tactics are being used” to move local tenants on.

“We’ve got this weird situation where there’s this boom with Total, yet, if you’re somebody who’s trying to exist on benefits or on minimum wage and aren’t able to move out of that income bracket, things are much worse for you. It’s a growing inequality.”

Councillor Allison “Flea” Duncan has previously cautioned his colleagues in the town hall about this very problem. “I said at one of the last meetings that the private rents in Shetland were astronomical and were going through the roof,” he told The Shetland Times. “I saw that happening over a year ago”.

He went on: “We have an economic boost in Shetland compared with a substantial part of the rest of the United Kingdom, but I’ve said all along ‘Where’s the housing?’ What’s the point of having a boom if the whole of the infrastructure is not in place?”

Mr Duncan believes the council may be forced to intervene to bring the situation under control. With a rapidly ageing population, he said, Shetland cannot afford for its young people to be priced out of the islands.

“The only way of getting out of this is hopefully we can start new house builds” he explained. “I wouldn’t have a problem with going into our reserves for a limited amount of money – I repeat, limited amount of money – and starting to build new houses.”

The kind of figure he has in mind, Mr Duncan said, was perhaps £3-4 million. However, he added: “One of the main obstacles in the way is wir £40.1million housing debt. If that was to be written off … then we would find the money to start house building.

“I’ve made it quite clear to [social services chairman] Cecil Smith that we need more housing.”

Were the SIC to go ahead with such a project, those houses would be “an asset to the council. Plus they would generate rental income immediately”.

The visit of the Scottish cabinet next week will provide an opportunity for local politicians to press ministers on the issue of housing, and the lingering housing debt.

Meanwhile, The Shetland Times’ petition calling on the Edinburgh and London governments to clear the SIC’s £40 million housing debt yesterday reached 2,200 signatures – around 10 per cent of the population.

The campaign will draw to a close shortly as pressure grows on both to find a way to resolve the matter. Council house tenants face the prospect of a 10 per cent rent rise if no action is taken.

www.dropshetlandsdebt.org