Private Rented Sector Stakeholder Engagement Group minutes: April 2024

Attendees and apologies

Chair

Patrick Harvie MSP, Minister for Zero Carbon Buildings, Active Travel and Tenants' Rights

Attendees

• Anna Gardiner (SLE)
• Aoife Deery (CAS)
• Ashley Campbell (CIH)
• Beth Reid (Crisis Scotland)
• David Melhuish (SPF)
• Emma Saunders (Living Rent)
• Ronnell Reffell (UK Finance)
• Timothy Douglas (Propertymark)
• Scottish Government officials

Apology

Caroline Elgar (SAL)

Items and actions

Welcome

The Minister for Zero Carbon Buildings, Active Travel and Tenants' Rights welcomed attendees to the meeting. He acknowledged that this was the first opportunity for many of those present to feed back to the Scottish Government on the published Housing (Scotland) Bill (the Bill), although there will be other opportunities during the Bill’s passage through Parliament.

The Minister acknowledged that, whilst there are areas of broad consensus around the measures in the Bill, there are some aspects which are more contentious, but that a housing system which reflects a human right to adequate housing is a goal which everyone can agree on.

The Minister invited attendees to give their views, noting that stakeholders will also be offered follow-up meetings with officials in the coming weeks.  

Housing (Scotland) Bill

The discussion covered the following points:

Propertymark

• Has the potential impact on local authority capacity and on their other statutory duties and services been assessed?

Accompanying documents such as the Financial Memorandum were published with the Bill and will be considered separately.

Equalities Impact and other Assessments for the Bill are currently being prepared for publication.

The Scottish Government will continue to work with local authorities regarding resourcing, as would be the case with any new duty for local authorities.

• The powers for Scottish Ministers to designate a rent control area allow for designation of a rent cap amount which could include a range or a percentage. Would such a decision be purely for Scottish Ministers, or would local authorities be expected to make recommendations on this?

The requirements are similar to the requirements around planning and energy responsibilities, in that local authorities make recommendations to Scottish Ministers, and Ministers will be the decision makers. This is the system that we think will work most effectively.

SPF

• The investor community is still experiencing a lot of uncertainty regarding the proposed measures, and are conscious that it could be several years before any rent controls are applied under the proposed legislation, during which time they will not know the form of any future rent controls.
• The proposed control of rents between tenancies remains a concern for investors.
• Members may be able to feed in information around good practice on pets in properties in discussion with officials.
• A steer on the medium term timescales for the Bill would be helpful.

The Scottish Government is conscious that there are different views regarding between-tenancy rent control, but consider that this is necessary for tenant protection.

If designed well and used in a well-evidenced way, we consider that this can be done in a way which reflects the need for certainty for landlords and protection for tenants.

On timing, it is for the Scottish Parliament to set the timescales for the Bill, and it will be for Parliament to set the number of evidence sessions and the timings.

SLE

• The view is that uncertainty around the Bill is hurting rural areas.
• Even a timeline of the Bill process would be helpful – stakeholders are conscious that secondary legislation and guidance will take some time.
• A concern that uncertainty is not helping supply in rural areas, noting that increasing supply could help towards resolving some issues around rent levels.

The indications are that the Bill may take approximately twelve to fifteen months to complete the parliamentary process and that the call for evidence is likely to be put out in the next few weeks.

After the parliamentary process is completed, assessments of rent control will take place, and these will be renewed on a five-yearly basis across all local authorities, unlike the rent pressure zone (RPZ) measures in the Private Housing (Tenancies) (Scotland) Act 2016, which left the onus on local authorities. The measures in the Bill will normalise the assessment process, although acknowledging that it may take some time to feel normal.

Living Rent

• Living Rent members are happy to see longer timescales, consultation requirements and between-tenancy rent control in the Bill.
• Has an equalities lens been brought to the pets and personalisation measures, given that some animals can be support animals, and some proposed changes to properties could be for accessibility?

Regarding equalities and adaptation, there are existing rights under the Housing (Scotland) Act 2006 for people with disabilities, and those rights will continue to exist, although it is possible that the personalisation measures set out in the Bill may also give people more confidence to exercise their existing rights.

The interplay between pre-existing rights and the proposed new rights would be covered by guidance.

Propertymark

• Is it possible that some areas or streets within an area where rent control is imposed could have a cap based on a percentage, and some have a cap based on a specific range? Could this create confusion in the sector?

We consider that that level of granularity would be unlikely, but there could be a difference in cases where, for example, a local authority has some rural and some urban areas which may need different treatment. It will be for local authorities to put forward recommendations on the basis of the evidence.

Living Rent

• Why has the review of eviction grounds not been taken forward?

The review of eviction grounds had to be slowed down due to work on the Cost of Living (Tenant Protection) (Scotland) Act 2022 and work on the Housing Bill, due to limited resource and capacity.

The Scottish Government is still committed to reviewing the eviction grounds and is considering what the timescales for this will look like in the light of other work arising from the Housing (Scotland) Bill.

• How will the measures in the Housing (Scotland) Bill work with energy standards?

It is reasonable for us to be expected to offer some illustration about how we might expect the system to work in practice with the Heat in Buildings Bill during the parliamentary passage.

We face a huge challenge in decarbonising housing stock, including the PRS. We would consider that if a landlord is going to make improvements which will save tenants money, the tenants may be happy to pay a little extra.

CIH

• CIH has been calling for better data collection, and is pleased to see the Bill trying to address the data gap.
• Concern about whether local authorities have the resources to engage with the private rented sector, and whether this may leave the onus on tenants to challenge poor landlord behaviour or unreasonable rent increases. Can more be done to support tenants with this, or to help local authorities to have more resources?
• Issues in the PRS aren’t always about lack of regulation, but about the need to enforce existing regulation more.

Data collection and resources for enforcement are important, and we will continue to work with local authorities on these matters regarding the measures in the Bill and the wider context of other requirements.

We are very conscious that times of economic pressure put pressure on local authority systems, and we are committed to continuing to work with local authorities to understand the resourcing implications.

SLE

• There is a lack of detail in terms of the change of circumstances for the property on the tenant.
• Concern about substantial works – that if it is overly bureaucratic to get the correct rent set, this may disincentivise landlords from carrying out improvement works on properties.

It is in no one’s interests for landlords not to improve properties, and we consider that there is some common ground here between landlords and tenants.

SLE

• In terms of data collection, there are some complications in relation to agricultural holdings and the landlord register – the owner will be listed on the register rather than the landlord. As the owner is not directly involved they are unlikely to know the rent if contacted.

The Scottish Government will consider further this point concerning agricultural tenancies.

Propertymark

• In terms of the interaction with the proposed legislation and energy efficiency, along with the 6% LBTT Additional Dwelling Supplement, landlords who are new to the market also have to consider potential high costs to increase energy efficiency.
• Will there be a commitment to review existing taxes and costs which fall to landlords as part of the consideration of this interaction?

The Scottish Government will consider further the matter of taxes and other costs faced by landlords.

Living Rent

• Since the emergency rent cap ended, Living Rent has seen members experiencing rent increases from 5-50%, and there are concerns that tenants are afraid to take their rents to adjudication.
• The Bill needs to place a clear onus on authorities rather than tenants, and there need to be penalties for landlords who do not comply.

The need for transitional measures at the end of the emergency legislation necessarily required something more complex than the rent cap.

We are conscious that there may be some tenants who may be less willing to challenge their landlords than others.

We are also aware that there will be a wide range of practice between very responsible landlords and those who are exploitative – it is important to encourage landlords who behave well.

There are measures in the Bill regarding using money from unclaimed tenancy deposits – there is the potential that this could be used to help tenants to exercise their rights.

Crisis

• There are connections between the PRS and homelessness prevention, and the potential for local authorities to save money with opportunities to work with the PRS if this can be got right, although acknowledging that the PRS can also be a source of homelessness.

It is always better to prevent homelessness than to respond to it after the fact, and the PRS can play a role both in preventing homelessness and for those coming out of homelessness.

Ten-to-fifteen years ago, there were more people becoming homeless from the PRS, and we are keen not to return to that situation. The proposed measures increasing penalties for unlawful eviction should disincentivise unlawful evictions.

We will continue to explore links between the Bill measures on the PRS and homelessness.

SLE

• Concern about situations arising in some rural areas where landlords are being asked to evict tenants so they can be placed on a housing list urban areas, in cases where, for example, an older tenant may wish to move nearer family but can’t afford to live in a more expensive urban centre. They understand tenants are being told this is the only way they will be able to get on the housing list.
• There is a concern that this may be skewing eviction figures, and is not working for landlords and tenants.  

The Scottish Government will consider the concerns raised regarding this.

The Minister thanked attendees for their time, and reiterated that there will be many more opportunities to discuss the measures in the Bill.

Actions

• Officials will further consider the points raised above, and will discuss as part of further engagement with stakeholders where appropriate.