Housing (Scotland) Bill: Fairer Scotland Duty Assessment Summary

Summary of assessment findings

Rented sector reforms

The rented sector provides a home for a diverse group of people and understanding the need and different experience of tenants is crucial in helping deliver our policy aims. Rented households are more likely to have lower household incomes and to be financially vulnerable than those in other tenures.

Households in the rented sector, especially those on lower incomes, in general pay more of their income on housing costs than owner occupiers. The rented sectors also have a higher proportion of people who are in relative poverty after housing costs, as well as children in relative poverty after housing costs.

The experience of affordability within the private rented sector is likely to be very different for more deprived and less deprived tenants. Over the period 2017-2020, private rented sector households in the lowest quintile of the Scottish Index of Multiple Deprivation were paying an average of almost half (47%) of their household income on housing costs, compared to only 17% for private rented sector households in the highest quintile^[4].

Households in the rented sector are also more likely to be financially vulnerable and have less resilience to cope with financial shocks^[5].

The Rented Sector Reform: Fairer Scotland Duty Impact Assessment^[6] sets out the impact of the measures in the Bill and details of the evidence assessed. The key impacts identified are summarised below.

Part 1 (Chapters 1, 2 and 3), Powers for Scottish Ministers to introduce rent control areas and changes to frequency of rent increases in non-rent control areas.

The rent control measures in the Bill are designed to help stabilise rents in areas where market rents have been increasing steeply, to support households in the private rented sector including those who are on low incomes to have more stability in their housing costs, supporting efforts to reduce poverty and to improve outcomes for low-income tenants and their families.

If rent control measures were to cause any reduction in supply of private rented sector stock, this could impact on market rents in areas where rent controls are not in place. Evidence suggests that reduced supply and access to the private rented sector may have a disproportionate impact on lower income and other demand groups in housing need, compared to the general population.

The Scottish Government are continuing to engage with the sector as we design the detail of how rent control will be implemented, and it is anticipated that there will be safeguards for landlords included in the policy design, in order to enable landlords and other investors to feel confident to remain in the sector.

The limited available evidence does not suggest that private rented sector landlords themselves are likely to be in deprivation.

Part 1 (Chapter 3), Capping of rent increases on referral or appeal

This measure on capping of rent increases on referral or appeal may be particularly beneficial for tenants on lower incomes as evidence suggests that those who reported having less confidence to raise a dispute with their landlord tended to be those with less financial power, including those on lower incomes and in part-time work, or younger, inexperienced renters.

Part 2, Evictions: duties to consider delay and damages for unlawful eviction

The measures to require the First-tier Tribunal for Scotland (Housing and Property Chamber) (“the Tribunal) or Court to specifically consider whether enforcement should be delayed at any time of year, where it would be reasonable to do so in the circumstances, will add another layer of protection for people on low incomes. This could help to reduce the negative impact of an eviction during times of financial pressure by taking into account the impact of the timing of an enforcement on the tenant and the landlord.

The measures to reform the way unlawful damages are calculated would remove current financial barriers that tenants face when progressing a legal case for damages for unlawful eviction. Evidence suggests that those on lower incomes may be more likely to be at risk of being unlawfully evicted. The measures will help to make it easier and more attractive for tenants to challenge an unlawful eviction and receive compensation where an unlawful eviction is found to have occurred.

Part 3, Keeping pets

Evidence suggests there may be some positive impact to private tenants for their mental health and wellbeing if tenants are able to have a pet. The evidence also suggests that additional barriers and costs associated with keeping a pet in the private rented sector were not evenly distributed, with low income households among the groups identified as being most severely impacted. If a supplementary deposit is provided for as one of the reasonable consent conditions, and this is requested by the landlord to cover the potential additional damage related to keeping a pet, this could result in some lower income tenants facing difficulty in experiencing the full benefits of the changes.

Part 3, Making changes to let property

Evidence suggests that there may be some positive impact for their mental health and wellbeing if private tenants are able to make changes to their home. As with keeping pets, above, if a supplementary deposit is provided for in secondary legislation and requested by the landlord in relation to making changes, this could result in some lower income tenants facing difficulty in experiencing the full benefits of the changes.

Part 4, Unclaimed tenancy deposits

Evidence suggests that this measure would benefit tenants as the use of unclaimed funds would be prescribed in law to ensure they can only be used for the benefit of private rented sector tenants. For example, funds may be used to address barriers to the private rented sector or to provide support for private tenants to exercise their rights. The use of this money may particularly help support those on lower incomes who may be more at risk of experiencing problems and disadvantage in accessing and exercising their rights.

Part 4, Ending joint tenancies

Evidence suggests that this provision will benefit tenants, especially victims of domestic abuse, as the current law can lead to tenancies being used as a means of financial control. Evidence^[7] shows that women (and their children) are more likely to experience domestic abuse. Women also earn less on average than men, are less likely to be paid the Living Wage and are more likely to not be working due to looking after children or home. This may lead to women having a lower independent income.

Currently, where there is a joint tenancy, the woman may leave the home but would remain jointly and severally liable for the payment of rent. Where this occurs, this situation will clearly constrain the choices and ability of women to obtain an independent tenancy of their own. Measures in the Bill create a process by which a joint tenant can bring the tenancy to an end. Where a joint tenant needs to make use of the new process, their future liabilities for the tenancy would be limited to approximately 3-months (the new 2-month pre-notice period, plus the standard 28-day notice period). Without this new measure, a joint tenant would remain liable for the rent on an ongoing basis unless the other tenants agree to end or assign the tenancy.

Part 4, Social landlords: delivery of notices

This minor technical amendment will benefit landlords and tenants by adding two new and additional options for giving notice of a rent increase but no socio economic impacts were identified.

Part 4, Converting older tenancies

If used, these measures would convert assured and short assured tenancies to private residential tenancies (“PRT”) to enable tenants to benefit from the PRT protections, together with the proposed protections in the Bill, and reduce complexity and confusion in the sector. No socio economic impacts were identified.

Part 5, Social landlords pre-action requirement where domestic abuse is a factor in rent arrears

This measure should benefit tenants who are victims of domestic abuse as evidence shows that financial abuse is a significant element of coercive control in domestic abuse. Other evidence, on different forms of economic abuse and its impact on women and children experiencing domestic abuse, demonstrates how victims may develop rent arrears as a result of financial abuse by their partner.

Summary

No changes are being suggested to the proposals as a result of the assessment. The proposals are intended to strengthen tenants’ rights whilst also seeking to strike an appropriate balance with the rights and needs of landlords.

A number of the provisions in the Bill create a legislative framework for the proposed changes, which will require further stakeholder consultation and secondary legislation to implement, ensuring that the development of detailed approaches can contribute as far as possible to reducing inequalities.

Homelessness Prevention

The Homelessness Prevention: Fairer Scotland Duty Assessment^[8] sets out the impact of the measures in the Bill and details of the evidence assessed. The key impacts identified are summarised below.

The introduction of new homelessness prevention duties will give increased opportunities for vulnerable individuals to be identified upstream, and supported, through their contact with a range of relevant bodies. This may result in averting the experience and possible trauma of becoming homeless.

The inclusion of domestic abuse measures in the duties (and the commencement of provisions in the Domestic Abuse (Protection) (Scotland) Act 2021 (“the 2021 Act”)) may positively affect women and children who are victim-survivors of domestic abuse. The duties will require social landlords to have a domestic abuse policy, which outlines how they will meet the housing needs of women experiencing domestic abuse, include how they will support them to stay in their own home, if that is what they want. This complements the provisions within the 2021 Act which gives social landlords greater control to transfer joint housing tenancies to a domestic abuse survivor, should this be desired, thus reducing the risk of homelessness for women in this situation.

As poverty is a structural factor which can lead to homelessness, the legislation will create opportunity for people at risk of homelessness to be supported earlier with the aim of preventing future homelessness in the instance of someone who is at risk of homelessness, and/or result in the housing of that individual, if they are homeless.

No changes are being suggested to the proposals as a result of the assessment. This is because the prevention of homelessness duties will benefit anyone in any group who currently has rights to access support, who is homeless or threatened with homelessness, therefore addressing inequalities and creating a fairer Scotland.

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Name: Alice Hall

Job title: Deputy Director, Better Homes Division