Housing (Scotland) Bill: business and regulatory impact assessment summary

Other Impact Tests

Scottish Firms Impact Test

Rented sector reform measures – there are expected impacts on Scottish firms from these measures, however, these have been mitigated in the legislation where possible to ensure they do not impose unmanageable costs.

As set out in the Rented Sector Reform BRIA^[29] there has been extensive engagement with a range of business stakeholders across Scotland. The majority of landlords and letting agents operating in the Scottish PRS are Scottish firms or individuals. The costs and benefits for the PRS are set out in detail in the Rented Sector Reform BRIA.^[30] The measures have been designed to ensure they do not impose unmanageable costs on private landlords. Because of the location-specific nature of housing, and the fact that all landlords and letting agents, regardless of origin, will be subject to the same legal and regulatory framework, the proposed measures will not directly impact on the competitiveness of Scottish private landlords with respect to non-Scottish firms.

Similarly, the costs and benefits for social landlords, as set out in detail in the Rented Sector Reform BRIA,^[31] reflect the expected impact of those measures on Scottish organisations which operate as social landlords in Scotland. This is particularly the case as organisations are not free to offer social tenancies in Scotland unless they are registered with the Scottish Housing Regulator and comply with the relevant social sector regulatory framework. As with the PRS, the measures have been designed to ensure that they do not impose unmanageable costs on social landlords. In addition to the requirement to be registered with the Scottish Housing Regulator, social landlords in Scotland must be not-for-profit bodies. The issue of their competitiveness with non-Scottish firms therefore does not arise.

Mobile homes provisions - some impacts are anticipated. Mobile home site operators are likely to see a slower increase in pitch fees because the CPI has historically been lower than the RPI. However, the CPI is considered a more accurate measure of inflation than RPI, which is no longer classified as a national statistic, and has the advantages for Scottish businesses that it is used in other parts of the UK and that forecasts are available.

All other measures in the Bill including homelessness prevention duties are not anticipated to impact on Scottish firms.

Impact on small Businesses

Rented sector reform measures - there are some indirect impacts which might be more challenging for smaller landlords. For example, larger landlords might have portfolios spread across a wider geography, and so a smaller share of their portfolio may be subject to rent controls. Any adverse impacts from rent controls on smaller landlords will be mitigated where possible by the flexibility built into the rent control framework. Also, familiarisation costs with the new measures will potentially be higher for smaller private landlords. Larger landlords can spread these fixed costs over their portfolio, reducing the per-property cost. In both cases, these are functions of the inherent advantages of larger portfolio size and not the direct result of the design of the measures. The Scottish Government will minimise any negative impacts on smaller businesses by providing clear information and, wherever possible, resources and tools to support landlords to meet any new requirements. Smaller landlords can also make use of letting agents, who can pool the fixed cost of familiarising themselves with these and other regulatory and legal requirements across multiple clients.

Measures proposed for the social rented sector are generally aimed at ensuring that best practice is embedded across the sector. Thus, for both smaller as well as larger landlords, there should not be significant compliance costs.