Cost of Living (Tenant Protection) (Scotland) Bill: equalities impact assessment

Consideration of the Specific Measures in the Emergency Legislation

Our assessment identified that the Bill is likely to have a direct positive impact on women, young people and single parents, ethnic minorities and on older or disabled people who may already be living in poverty, and struggling to meet their housing costs. While women are more likely to be in part-time and low paid/precarious work they spend a higher proportion of net income on housing (and fuel and food)^[14]. Renters with a disability are also more likely to be concerned about being able to afford other essentials like food, heating, and clothing in comparison to renters without a disability^[15].

Consideration has been given to how the proposals in the Bill will impact whether negatively or positively on each of the protected characteristics of those living in social and rented households and also those living in college and university halls or residence and in Purpose Built Student Accommodation (PBSA) and what might prevent outcomes being achieved.

Each group of measures is considered in turn below.

Measure 1: Rent freeze

A temporary restriction on rent increases (with a cap initially set at 0%) will help to stabilise bills for vulnerable tenants and reduce the risk that a rent increase will result in a tenant being unable to meet the cost of their rent during the cost crisis or build up substantial rent arrears resulting in a risk of eviction.

A rent freeze is anticipated to have a positive impact on all tenants who may have otherwise experienced a rent increase during the 6-month rent freeze period and with protected characteristics who spend a higher proportion of net income on housing (and fuel and food) on average.

Recognising that the potential for increased costs also applies to landlords, many of whom are small scale and exposed to mortgage rate increases we have also put in place a number of safeguards which will allow private landlords to apply to increase rent in respect of limited, prescribed, legitimate costs associated with offering the property for rent. This obviously reduces slightly the benefit for tenants with landlords in this situation but to ensure this is proportionate an overall cap of 3% has been placed on any rises, even where the prescribed legitimate costs can be established.

The Scottish Government considers that this strikes an appropriate balance, taking into account the impacts which the cost crisis is having on some landlords, and will mitigate against a disproportionate impact on landlords.

Specific consideration is given below to three cohorts of tenants, who are not resident within the social rented sector or PRS.

College and University Halls of Residence and Purpose Built Student Accommodation (PBSA)

The Bill’s temporary measures, the application of the rent freeze (and moratorium on evictions) applicable to all providers across college and university halls of residence and PBSA, will enhance the rights of student renters in such accommodation and provide reassurance to them that there will be no in-tenancy rent increases. This will ensure parity of protection of this sector with the PRS for these tenants who, as set out above, are likely to be young and likely to have a wider variety of ethnic backgrounds than those in some other tenures.

The Scottish Government is committed to developing a Student Accommodation Strategy for Scotland informed in part by the PBSA review which is being taken forward in parallel with the New Deal for Tenants. The review is being driven forward by the PBSA review group which includes sector representatives.

Homes with Pitch Agreements

Situations where residents own a mobile home unit but lease the land on which it sits present unique circumstances. Pitch agreements on mobile home sites and Gypsy/Traveller Sites are regulated by the Mobile Homes Act 1983 and are not included in the emergency legislation. We have therefore considered alternative protections for people with pitch agreements.

Gypsy/Traveller communities are at high risk of poverty, with Census data^[16] highlighting that Gypsy/Traveller households are more likely to have a characteristic that is associated with poverty, including being more likely: to have 3 or more children; to report a long-term health problem or disability; to report bad or very bad general health; live in lone parent households. Gypsy Travellers are also more likely to be in irregular work or be economically inactive and have a low income.

Research for the Scottish Government in 2019 found 29 public Gypsy/Traveller sites across Scotland, providing a total of 397 active pitches. Some of these are seasonal or transit pitches and a number will be closed for refurbishment over the period. Rents are set once a year in line with the social sector so the initial proposed rent freeze (due to end on 31 March) will not have a practical effect unless it would be extended past 1 April 2023.

While Gypsy/Traveller pitch agreements will not be bound by the emergency legislation, we will work with social landlords to agree an administrative pitch fee freeze and evictions ban to ensure parity with their other tenants.

Residents on licenced residential mobile home sites

There is limited data available on mobile home sites but stakeholders estimate that more than six thousand people live on them. As mobile home parks are a common choice for people downsizing for retirement and some sites impose a minimum age, residents are more likely to be older and living on pension income.

The Mobile Homes Act 1983 already places a limit on the increase in pitch fees with a presumption that pitch fees will not increase above the level of Retail Prices Index (RPI) each year, at an annual review date. We recognise that the gap between RPI and Consumer Price Index (CPI) has grown recently with the effect that pitch fees are growing faster than income. We will therefore consult on the impact of changing the basis of uprating from RPI to CPI, with a view to including this in the 2023 Housing Bill to bring cost rises for residents in to line with pension increases.

If the owner of a Mobile Home Site wants to terminate a contract for a pitch on one of the grounds set out in the contract, they must apply to the Court and a Sheriff will decide whether it is reasonable to do so and, if so, what the appropriate date would be to end the contract. The Sheriff will apply the usual tests of reasonableness used when possession is sought. Factors such as the reasons for arrears e.g. rising energy prices, may be taken into account within the courts existing discretion.

Measure 2: Moratorium On Evictions

It is anticipated that a temporary moratorium on evictions will help to prevent the negative impacts on the health and wellbeing of tenants caused by being evicted and/or being made homeless. In addition it will provide more time for people to seek support and to find alternative accommodation that meets their needs at an affordable rent.

Findings from evidence reviews and research studies undertaken in the UK (including Scotland) suggest that feelings of insecurity related to tenure have impacts on tenants’ health and wellbeing^[17]. Evidence suggests that there are multiple mechanisms through which vulnerable households can experience insecurity: actual experiences of eviction; fear of the threat of eviction causing residents to feel insecure and ‘not at home’ in their house; and the challenge of finding a new tenancy within the market^[18].

This research notes that negative psychosocial effects of living in insecure and precarious (as well as unaffordable housing) impact on tenant wellbeing and mental health. These studies conclude that the negative impacts of housing insecurity are complex and affect tenants in several different ways including by causing financial distress (including around potential expenses related to moving); causing concerns over finding a new property; making it difficult for tenants to feel at home and connected to place when insecure; and by causing stress over the potential of being separated from local support networks; among other mechanisms.

While much of this research is qualitative and based on the lived experience of tenants (particularly those on a low income), a larger study that linked data from the UK Household Longitudinal Study to measurable health outcomes found that desire to remain in current home was one element that led to significantly increased levels of biomarkers associated with infection and stress^[19].

In their interviews with tenants, McKee et al^[20] (2019) conclude that feelings of insecurity were commonly reported amongst those on low incomes, and it is reasonable to suppose low income tenants are also most likely to be additionally impacted by the current cost of living crisis. Furthermore, a 2018 report^[21] by the Joseph Rowntree Foundation on forced evictions in England and Wales concluded that “the experience of forced moves and evictions were extremely stressful for low-income households as they struggled to find alternative properties because they are often seen as undesirable by private landlords and are often unable to access social housing”.

Related to this, findings from the RentBetter study’s 2020 baseline survey^[22] of landlords and letting agents found that only a quarter of respondents indicated that they would accept new tenants where rent for the property was paid in full or part by Housing Benefit or Universal Credit, with another quarter indicating that they would ‘only sometimes’ let to tenants in those circumstances.

The temporary prevention of enforcement of eviction action in the private rented sector will have a mostly positive impact on the rights and protections of tenants as a way to prevent evictions and reduce homelessness.

However rent arrears and debt will continue to accumulate, so for some tenants delays in eviction may increase their overall of debts to unsustainable levels and data from the Tribunal suggests that even without these delays debt levels at the point of eviction for rent arrears are very high^[23].

In addition, where some tenants are evicted for rent arrears it is often extremely challenging for them to secure alternative accommodation in the PRS where landlords or letting agents seek references or carry out credit checks.

Responses in the report ‘Covid recovery: a consultation on public health, public services and justice system reforms’ highlight concerns that similar restrictions in place during Covid could result in financial hardship for landlords and could negatively impact the available rental stock^[24]. The restricted nature of the grounds of the appeal will potentially exclude landlords who are reliant on rental properties as a source of income, such as older, small scale landlords who do not have alternative employment or pension related income. In these cases, the need to meet the rising costs of offering the property for rent could have an impact on their ability to meet the cost of meeting their own basic expenses. For this reason, appropriate safeguards have been considered as part of the Bill development process and provided for within the Bill.

A moratorium on evictions applicable to all providers across college and university halls of residence and PBSA will enhance the rights of student renters and provide reassurance to them that there will be ‘no evictions except in specific exempt circumstances relating to criminal or anti-social behaviour or abandonment’. This will ensure that there is parity of protection of this sector with the PRS.

The regular review of the provisions and the Government’s intention of taking forward a Student Accommodation Plan for Scotland will go some way to alleviating potential impacts on landlords.

Measure 3: Unlawful Evictions

The measures in the Bill will change the way in which civil damages can be awarded for unlawful eviction making it easier and more attractive for tenants to challenge an unlawful eviction and receive appropriate damages where an unlawful eviction is found to have occurred. This will provide additional protection to renters in the private rented sector from unfair eviction action by private landlords in direct response to the introduction of a temporary Rent Freeze seeking to raise rents for a new tenant.

It was reported in Nationwide’s RentBetter Project Wave 2^[25] findings that illegal evictions may have increased during the emergency coronavirus legislation period and that a longer-term impact of the extended notice periods is that evictions can be expected to increase over the coming months and years.

The ‘New Deal for Tenants: Draft Rented Sector Strategy’ proposed that the current calculation of civil damages for unlawful eviction should be reformed and simplified, and a very substantial majority – 94% of those answering the question – agreed. The importance of raising tenants’ awareness of their rights in relation to illegal evictions was highlighted, with suggestions that this could be done via the tenancy agreement or could involve a media/social media campaign.

In relation to disputes with landlords, and access to justice, the RentBetter Wave 2 Tenants Qualitative Report^[26] reported that those with less confidence in raising disputes were again those with less financial power – often those on lower incomes and in part-time work, or younger, inexperienced renters. We therefore consider that this change will have a positive effect in protecting both younger renters and those with lower incomes or less financial stability. As set out above, people with a number of protected characteristics are more likely to fall into the latter two categories, and we therefore consider that this measure will have an overall positive affect. In addition, preventing unlawful evictions and keeping people in their homes will also contribute to stability and reduced costs on tenants.

However, the legislation also recognises that there may be some cases where a landlord will rely on rent and a tenant may choose not to pay, even when they can afford it. As set out earlier, many landlords only have 1 or 2 properties^[27] and be vulnerable to tenants not paying rent for a prolonged period.

Therefore some mitigations that support both vulnerable landlords and tenants have been put in place including:

• allowing eviction on the grounds of anti-social behaviour and criminality - to protect both landlords, neighbours and other tenants.
• allowing eviction on the grounds of abandonment – to ensure empty homes can be brought back into use quickly for renters to access.
• Creating 3 new grounds of eviction to support landlords experiencing hardship^[28].
• Setting the maximum period that any individual enforcement action will be prevented for will be 6 months – to give tenants an extended period to consider alternative accommodation and landlords certainty that they can plan for.

Measure 4: Rent Adjudication

We recognise that there may be some unintended consequences through the introduction of a rent cap. For example, given that the legislation is temporary, the termination of the rent cap may lead to a large number of landlords seeking to increase their rent all at once, and setting rent by reference to the open market rent could result in significant and unmanageable rent increases for tenants. In these circumstances, the existing rent adjudication process would not provide a reasonable mechanism for determining a reasonable rent increase.

Therefore, to support transition from the emergency measures, the Bill contains a regulation making power to temporarily reform the rent adjudication process. This could include for example, to ensure that the Rent Officer or First-tier Tribunal cannot determine a rent higher than that requested by the landlord.

The regulation making power will be subject to the affirmative procedure ensuring that appropriate scrutiny is given to the necessity for any temporary changes proposed and will also be subject to consultation.