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

Consumer Assessment

Does the policy affect the quality, availability or price of any goods or services in a market?

Rented sector reform measures – some impacts are anticipated in relation to the rent control measures, and the Scottish Government has sought to mitigate these where possible in the legislation. No impacts are anticipated in relation to the other rented sector reforms.

The rent control measures in the Bill are intended to help stabilise rents in areas where market rents have been increasing particularly steeply. In areas where rent controls are imposed, a cap will be applied to rent increases, helping to make rents more affordable and predictable than they otherwise would have been. Some stakeholders have raised concerns that rent control measures could impact on the quality of properties being offered to let, due to landlord concerns about the costs of maintaining property quality when rental income may be capped, or that the supply of properties may be reduced as a result of rent control and the cumulative effects of other rental reform measures, leading to higher rents in the longer term. However, the design of the rent control framework includes a number of flexibilities to mitigate such negative impacts.

The remaining rented sector reforms are not expected to have a material negative effect on the quality, availability or price of any goods or services in a market. Indeed, measures such as improved rights to keep pets and personalise their homes should help improve tenants’ experience of their rental housing, helping to make them feel more at home. The changes to the method for assessing damages from an unlawful eviction will also give greater protection to tenants.

Mobile homes measures - yes the measures will affect the price for pitch fees by changing the inflation measure used in the process of annual uprating from the RPI to the CPI.

All other measures in the Bill including homelessness prevention are not expected to affect the quality, availability or price of any goods or services in a market.

Does the policy affect the essential services market, such as energy or water?

No. All measures within the Bill including rented sector reform, homelessness prevention, and mobile homes are not expected to affect the essential services markets.

Does the policy involve the storage or increased use of consumer data?

Yes. There is a small increase of consumer data resulting from measures set out in the Bill and these have been identified within the Data Protection Impact Assessment and reported to the Information Commissioners office specifically in relation to the Rent Control measures, and the Registration of Letting Agents measures.

All other measures in the Bill including homelessness prevention and mobile homes are not expected to involve the storage or increased use of consumer data.

Does the policy increase opportunities for unscrupulous suppliers to target consumers?

No. All measures within the Bill including rented sector reform, homelessness prevention and mobile homes are not expected to increase opportunities for unscrupulous suppliers to target consumers.

Does the policy impact the information available to consumers on either goods or services, or their rights in relation to these?

Rented sector reform – some impacts are anticipated.

The package of rented sector reforms will in general give tenants greater, and more clearly defined, rights. Effective implementation of all rented sector reform measures will require a programme of awareness-raising and guidance for landlords and tenants on their changing rights and responsibilities under the measures and how to exercise and enforce them.

The Bill includes a duty on prospective landlords whose property is in an area where rent controls are applied to include more information in property adverts. New statutory notices and updates to statutory notices are likely to be required as part of the implementation of the rent control regime, and care will be taken to include information for consumers on their rights as part of these notices and in accompanying guidance.

All other measures in the Bill including homelessness prevention and mobile homes will not impact the information available to consumers on either goods or services, or their rights in relation to these.

Does the policy affect routes for consumers to seek advice or raise complaints on consumer issues?

Rented sector reform – there are no impacts anticipated in relation to the social rented sector. The sector already has existing procedures and robust routes of redress for tenants. Some impacts are anticipated in relation to the PRS reforms.

The proposed PRS reforms are expected to create some new or expanded routes for challenge in relation to compliance issues. Similarly, measures to provide private tenants with increased right to keep pets and to make changes to their home will create new redress routes to the Tribunal for tenants where tenants think that a landlord has failed to comply with requirements.

New Homes Ombudsman measures – the New Homes Ombudsman scheme, provided for in the UK Building Safety Act 2022 (“the 2022 Act”), is intended to drive up standards in housebuilding and to independently resolve disputes between developers and purchasers where there is an issue concerning the standards of conduct or quality of a new-build home. The minor provision in the Bill is intended to ensure that there are no barriers to cooperation between the Scottish Public Services Ombudsman (“SPSO”) and the New Homes Ombudsman (“NHO”), when established, supporting effective and full consideration of complaints under the NHO scheme.

All other measures in the Bill including homelessness prevention and mobile homes will not affect routes for consumers to seek advice or raise complaints on consumer issues.

Test Run of Business Forms

The measures in the Bill do not introduce any new statutory forms directly.

Rented sector reform – there is provision within the Bill for regulation-making powers that will introduce or modify statutory forms as well as information requirements for some of the new processes, for example when requesting to keep a pet, or making changes to let property. These will be subject to consultation as part of developing regulations in due course, and any resulting forms or templates will be tested with those affected.

Mobile homes measures - will require site operators to update their existing forms, but changes are expected to be minimal.

All other measures in the Bill including homelessness prevention will not introduce any new statutory forms.

Digital Impact Test

Rented sector reform – some impacts are anticipated.

There are some digital impacts in relation to the implementation of rented sector reforms in the Bill. Requirements for private landlords advertising property for let which is within a rent control area to include supplementary information in property adverts will apply to any written advertisement. The design of this measure therefore ensures that the requirement will apply to advertisements placed online as well as more traditional advertisements, offering the maximum protection to tenants, through whatever medium they become aware of the advertised property. Other protections for tenants which could be introduced as part of the implementation of the Bill include a potential requirement on private landlords to provide further statutory information at the beginning of a tenancy, as well as development of further statutory notices for use by landlords and tenants in relation to the measures in the Bill. It is intended that these changes will be supported by modifications to online tools and information currently provided by the Scottish Government to support private landlords and tenants in complying with statutory requirements.

All other measures in the Bill including homelessness prevention and mobile homes will not have an impact on advances in digital technology or its future delivery.

Legal Aid Impact Test

Rented sector reform - in Scottish Legal Aid Boards’s view, the rented sector reforms could lead to a modest increase in legal aid applications, or would involve additional procedure, and in turn cost. However, they consider that any cost increase would probably not be significant.

All other measures in the Bill including homelessness prevention and mobile homes will not have an impact on the legal aid fund.

Enforcement, sanctions and monitoring

Rented sector reform measures - are set out in the Rented Sector Reform BRIA.^[32] This includes the proposed measures for rented sector measures, including routes that support consideration of compliance as part of the operation of the measure once they are implemented.

Homelessness prevention measures - the Scottish Government will work with relevant bodies to identify how best to utilise existing regulatory frameworks and review procedures in relevant bodies for the new prevention duties, including the Scottish Housing Regulator.

The Scottish Government is currently undertaking a review of their homelessness and homelessness prevention data collections. The review will focus on the collection of data from local authorities to begin with, but linking to any new duties introduced there may be scope to widen this, to identify if and what data can be incorporated from relevant bodies.

No need for sanctions is anticipated.

Mobile homes measures - provide for dispute resolution by the Sheriff Court (or by arbitration). If a site operator continued to use RPI for uprating, residents would be able to take a case to court in the same way as for any other breach of their contract. The proposed changes require the court to consider that a pitch fee is unreasonable if it seeks to compensate for income lost due to the change in index. If a pattern of non-compliance were to occur, stakeholders, in particular residents associations, would bring it to the attention of the Scottish Government.

Implementation and delivery plan

The Bill was introduced to parliament in March 2024 and, if passed by parliament, is expected to receive Royal Assent around July 2025 at the earliest. It is expected that a phased implementation of the Bill will be delivered, with some measures coming into force shortly after the Bill is passed, while other measures will require time to allow for further engagement with stakeholders, and the preparation of regulations and guidance ahead of implementation.

Rented sector reform measures - a number of these measures in the Bill will require further consultation followed by secondary legislation before they can be fully implemented. The measures in the Bill provide the framework which will allow for the requirements to be introduced, ensuring the measures are flexible and can respond to wider circumstances in operation. Implementation of the measures, if the Bill is passed by the Scottish Parliament, will be over multiple years. A number of public bodies will be involved in implementation of the rented sector reform measures in the Bill.

The Scottish Government will continue to engage with stakeholders and representative organisations during and post-implementation, in order to ensure smooth delivery and reduce the risks of the policy objectives not being achieved. To support the implementation of the proposed changes across the rented sectors, the Scottish Government will undertake a range of activities to raise awareness of the changes to support both tenants and landlords, helping to ensure that they are aware of the new rights and responsibilities arising from this legislation.

Homelessness prevention measures - these specific powers are expected to be implemented from 2027 onwards, although implementation will be subject to further engagement with stakeholders.

Mobile homes measures - it is intended that the change in index from RPI and CPI takes effect shortly after legislation is in place. Then the change will be implemented on individual sites by site operators at the time that they issue their next annual pitch fee review.

Post-implementation Review

The Scottish Government will monitor whether the measures once implemented, including through regulations, are having the intended effect and whether they are implementing policy objectives efficiently. Plans for monitoring and review will be developed as regulations and guidance are developed. The Scottish Government will continue its regular engagement with key stakeholders.

Summary and recommendation

As set out in the policy memorandum which accompanied the Bill the introduction of legislation is the preferred option for all the measures within the Bill.

Rented sector reform measures proposed have been developed through consultation and engagement with those living and working in the rented sectors. The measures respond to the need to improve the housing outcomes in Scotland for people who live in rented accommodation while continuing to safeguard the proportionate use of a landlord’s property for rental purposes. The Bill provides the necessary flexibility to respond to evolving market conditions and deliver a fair balance between protection for tenants and the rights of landlords.

Homelessness prevention, legislation will build on existing good practices and place a collective responsibility across public services to prevent homelessness. Having legal duties in place will set clear expectations of the public sector. Additionally, legislation with accompanying guidance will best meet the expectations of stakeholders who have already expressed concerns over delivery of the prevention of homelessness duties.

Mobile homes measures legislation is required to ensure that the protections relating to pitch fee uprating for residents of residential mobile homes on permanent licenced sites remain fair, appropriate and in line with development of statistical measures of inflation.

Declaration and publication

I have read the Business and Regulatory Impact Assessment and I am satisfied that (a) it represents a fair and reasonable view of the expected costs, benefits and impact of the policy, and (b) that the benefits justify the costs. I am satisfied that business impact has been assessed with the support of businesses in Scotland.

Minister’s name: Paul McLennan

Minister’s title: Minister for Housing

Date: 27 September 2024

Scottish Government contact point: housing.legislation@gov.scot