Energy efficiency and condition standards in private rented housing: consultation analysis

Assessing impact

Question 2.31 - Please tell us about any potential economic or regulatory impacts, either positive or negative, that you feel the legislative proposals in Part 2 of this consultation document may have, particularly on businesses.

Many of the comments at this question focused on the potential economic impacts and raised very similar issues to those made regarding the energy efficiency proposals at Question 1.31. Generally positive comments included that in the longer term the health and economic impacts of investing in improving the quality of private rented homes are likely to outweigh any short-term costs.

The most-frequently identified positive economic impact was that that the proposals could provide opportunities for a range of building and other trades who would be involved in delivering any improvements required. Specific comments included that there would be an increase in renewable heating, insulation and other related business activity; that the proposals could lead to job creation and retention; and that they could help stimulate the local supply chain and local businesses.

Other positive economic impacts identified included less fuel poverty.

In terms of potential negative impacts, the most frequently suggested were:

• Increased costs to landlords. It was suggested that the proposals will potentially have significant cost implications for some properties and landlords.
• Increased rental prices to offset additional costs or as a result of limited supply, particularly in rural areas. It was suggested that the proposals will put greatest pressure on landlords who currently charge the lowest rents and that monitoring of rent levels will be required.
• Loss of capacity in the PRS. Landlords will withdraw from the private rental market. Specific suggestions included that landlords with rural properties may be particularly likely to leave the market or that older landlords may be likely to disinvest.

Other less frequently-made comments included:

• If many properties come onto the market as a result of the proposals, house prices could be driven down.
• The types of works required could risk disturbance to tenants and some of the works may only be possible when a property is empty.
• The apparent suggestion that landlords providing white goods, fitting thermostatic mixers, installing carpets, etc. will "safeguard their investment" is questionable.
• The partial Business and Regulatory Impact Assessment is inadequate or inaccurate. Particular concerns included that there is little consideration of the relative impact on rural and urban housing or that costs will vary based on the size, structure and location of the property. It was also suggested that the costs set out fall far short of the likely sums involved.

There were diverging comments about whether the proposal could or should affect agricultural tenancies under the Agricultural Holdings (Scotland) Act 1991. One view was that all residential leases should be brought under the same repairing standard. It was suggested that to not do so could create problems with referrals to the FTT for breaches in the repairing standard. Associated suggestions were that guidance could be issued by the Land Court/Tenant Farming Commissioner that:

• Breaches of the repairing standard/minimum energy efficiency standard would be classed as "landlord in persistent breach" and would be accepted as a trigger of tenant right to buy.
• Improvements made to bring properties in line with the standards set out in the legislation should be discounted entirely from rent reviews.

An alternative perspective was that including agricultural tenancies without the law being changed to allow landlords to recover some costs will make tenancies which are currently only marginally viable, unviable. It was suggested that it is not reasonable to ask landlords to carry out upgrading work without being able to recover costs through higher rental charges.

Finally, there was a small number of comments around regulation and particularly about the possible impact of the proposals on local authorities. These included that:

• The impact of the proposals will fall disproportionately on decent landlords unless landlords who do not comply are pursued actively. It was suggested that if it local authorities are not properly resourced to fulfil their obligations then it will be unfair on landlords who are meeting their responsibilities.
• Further amendments to the Repairing Standard may increase the level of resources required to carry out property inspections.
• There will be costs to local authorities associated with training required.

Question 2.32 - In relation to the interim Equality Impact Assessment, please tell us about any potential impacts, either positive or negative, that you feel the proposals in Part 2 of this consultation document may have on any groups of people with protected characteristics. We would particularly welcome comments from representative organisations and charities that work with groups of people with protected characteristics.

Only 20 respondents made a comment at Question 2.32 and a small number of these comments simply stated that they anticipated no impact.

Otherwise, comments tended to divide into one of two positions. One viewpoint was that the proposals will have a positive impact on health and wellbeing and that raising the basic standard of repair will benefit all private tenants, including those with protected characteristics. Specific reference was made to benefiting older people and children.

The other perspective was that there could be a negative impact if landlords leave the sector or increase rent charges as a result of the changes. It was suggested that the PRS is already unaffordable for some and this has a knock-on effect of increasing pressure for social housing.

It was also suggested that better evidence is needed to support the statement in the Equalities Impact Assessment that "We do not consider that any groups with protected characteristics will be disproportionately affected by the proposed changes to the repairing standard", and that careful consideration should be given to how enforcement is targeted and resourced. A specific equalities proofing exercise, carried out with relevant at-risk groups and their representatives was suggested.

Question 2.33 - To help inform the development of the Child Rights and Wellbeing Impact Assessment, please tell us about any potential impacts, either positive or negative, that you feel the proposals in Part 2 of this consultation document may have on children's rights and welfare. We would particularly welcome comments from groups or charities that work with young people.

Only 20 respondents made a comment at Question 2.33 and again a small number of these comments simply stated that they anticipated no impact.

As in relation to the Equality Impact Assessment, other comments suggested that the proposals will have a positive impact on health and wellbeing, including that of children or that children could be adversely affected if fewer properties are available or families are faced with higher rental payments. Specific points included:

• A potential decrease in private rented properties could mean increased waiting times for temporary accommodation and/or affordable housing for families with children.
• Children will benefit if improved standards mean families remain in the same property for longer.
• Many of the proposals will reduce risk of harm to children, for example the introduction of thermostatic mixer valves should reduce the risk of scalding. Improving food safety will help protect children.
• Warmer, safer homes could mean family income is re-directed toward healthier living options such as nutrition and exercise. Also, children may be less likely to develop health issues or suffer from a lack of concentration meaning that there are benefits to the Health and Education systems.