Private Rented Sector Stakeholder Engagement Group minutes: August 2024

Attendees and apologies

Attendees

• Anna Gardiner (SLE)
• Caroline Elgar (SAL)
• David Melhuish (SPF)
• Emma Saunders (Living Rent)
• Gordon Maloney (Living Rent)
• John Blackwood (SAL)
• Rhuaraidh Fleming (Crisis Scotland)
• Timothy Douglas (Propertymark)
• Stephanie Millar (CAS)
• Scottish Government officials
• Chief Rent Officer, Rent Service Scotland

Apologies

• Aoife Deery (CAS)
• Callum Chomczuk (CIH)
• Ronnell Reffell (UK Finance)

Items and actions

Welcome

The Chair welcomed attendees to the tenth meeting of the PRS Stakeholder Engagement Group.

Actions and minutes from previous meeting

Minutes from the previous two meetings were issued prior to this meeting and were agreed.

Update and overview of the ongoing Bill process

The Chair updated members on the Housing (Scotland) Bill.

The Bill is currently being considered by both the Social Justice and Social Security and the Local Government, Housing and Planning Committee, which have taken evidence from a range of stakeholders.

Whilst the timetable for the Bill process is a decision for the Scottish Parliament, Scottish Government officials are working on the assumption that stage 1 will likely be completed in early autumn 2024, with stage 2 following and stage 3 potentially completing by summer 2025.

The Chair invited questions from members.

• Is there a timescale for any secondary legislation and implementation once the Bill process is complete?

There are a number of measures in the Bill which will make changes in the rented sector, and the Scottish Government is considering what would be involved in implementation. Stakeholder engagement will continue as part of this.

• Will the Business and Regulatory Impact Assessment (BRIA) for the Bill be published soon?

The BRIA is one of a suite of impact assessments, some of which (the Equality Impact Assessment, the Fairer Scotland Duty Assessment and the Island Communities Impact Assessment) have already been published. It is anticipated that the Children's Rights & Wellbeing Impact Assessment will be published next, with the BRIA to follow.

Similar to the other impact assessments, there will be a summary BRIA document covering the whole Bill, supported by more substantive separate documents covering the rented sector reform measures and other aspects of the Bill.

Update on use of post-Cost of Living (Tenant Protection) (Scotland) Act 2022 transitional rent adjudication measures

The Chair welcomed the Chief Rent Officer to give an update on the operation of the transitional measures from 01 April 2024.  

The introduction of the transitional measures, along with a successful tenants’ rights publicity campaign led to a large influx of applications from 01 April. 938 applications have been received to date, which is a large increase on the numbers being received before the Cost of Living (Tenant Protection) (Scotland) Act 2022.

210 of these applications have been determined to be invalid. Reasons for this included applications not being submitted within 21 days of receiving the rent increase notice, application forms not containing enough information, or applications arising from rent increase notices which were themselves invalid.

614 decisions had been made by the beginning of the week of the meeting.

86 applications had been withdrawn. In these cases rent officers are still required to make a decision, and the rent is set at an amount which has been negotiated between the landlord and the tenant.

A number of applications have related to rent increases of around 6%. The average increase seen in applications has been around 20%, and the highest was 90%.

In 299 cases, the rent in the decision was the proposed rent, as this represented the lowest of the three factors considered (i.e. the proposed rent, the open market rent and the permitted rent for the property).

Rent Adjudication decisions are published in spreadsheet form, and there are plans to digitise this in future.

Approximately 100 applications are still waiting for a decision, but these are all well within their target dates.

Applications have slowed from 80-100 applications a week to approximately 30.

Rent officers are based around the country, and collect market rent data from advertised rents, as well as information voluntarily provided by some landlords and letting agents about the rents they charge.

Questions were invited from members:

• What proportion of applications result in a visit to the property?

Around 200 property visits have been carried out since April 2024, noting that in some case tenants requested that rent officers did not visit the property due to difficulties in the relationship between landlord and tenant.

• What is the average turnaround time for adjudication applications?

The average time to process a case is around 40/45 days. If rent officers receive the application within 21 days of the rent increase notice, there are around 70 days to process the application before the effective date of the proposed rent increase.

• Some tenants have struggled with delays in decisions, and there is also some frustration that quality and disrepair aren’t taken into account. Tenants who have received decisions are sometimes deterred from appealing a decision to the Tribunal as the decision letter doesn’t mention the permitted rent, leaving tenants concerned that their rent could be increased by above 12% on appeal. Some tenants have received eviction notices after appealing their rent.

Consideration can be given to whether information on the application of the amended process can be made clearer in the decision letters and on the guidance page.

Whilst rent officers generally don’t know whether a tenant appeals a decision to the Tribunal, in cases where tenants have called the helpline, it has been made clear to them that, if the original decision was for an increase of less than 12%, it is possible that the appeal decision could set the rent higher (up to the 12% limit).

There have been some cases where tenants have referred a decision for review by another rent officer. 36 of these have found in the tenant’s favour, often where additional information including photographs of property quality have been supplied.

When reviewing a case, rent officers will adjust the market rent for the specific property being assessed, which does take some account of property quality.  

• No information is currently collected on the reasons for rent increases – would it be helpful for this to be collected?

This is not collected at the moment, although for prescribed costs under the Cost of Living (Tenant Protection) (Scotland) Act 2022, landlords needed to provide evidence of higher mortgage rates or increases in costs when applying for the higher rate of increase.

However, we are aware that not all rent increases are a result of cost increases (for example, some landlords own their properties outright) and it is for landlords to set their own rent schedule.

• Where there are published rent adjudication decisions representing an increase of over 12%, are these cases which were withdrawn by the tenant?

Yes.

• Some tenants find the 21-day period for referring a proposed rent increase for adjudication causes them difficulties – noting that a similar period is proposed in the Housing (Scotland) Bill.

The Scottish Government is aware of concerns raised by some stakeholders about the 21-day deadline.

The timescales were set to allow for the necessary investigation for rent adjudication to take place within the three month notice period for a rent increase.

Rent officers are statutorily independent officers who are required to balance the rights and interests of landlords and tenants in their decisions. There could be a disadvantage to the landlord if the rent increase does not take place when it was originally due because of delays in the adjudication process.

• Noting the high number of invalid applications, what can be learned from this for the future?

It is important to strike a balance between ensuring people have a route to challenge rent increases whilst also ensuring that resource is used as effectively as possible.

The Scottish Government acknowledges the importance of good guidance and tools, and making processes as clear as possible as part of supporting tenants and landlords to navigate these processes

• A searchable database of open market rents used would be helpful for landlords and tenants, and may reduce application numbers

Minor technical amendments to Statutory Rent Service Scotland forms

The Scottish Government plans to make a some minor changes to the notices that support applications to Rent Service Scotland for rent adjudication, which will require regulations in the coming months. These include an address change and changes to an email address, as well as clarifications in the language to make it more accurate. As part of that process, the Scottish Government may seek to share drafts of the updated forms with the Group for consideration.

Any other business

The Chair invited any further questions or matters for discussion.

• Are there any plans to take forward something similar to the ability under the transition measures for factors other than market rent to be considered as part of rent adjudication?

All that is currently under consideration is the proposed measure in the Bill preventing the rent from being increased at adjudication above the rent being proposed by the landlord.

The Chair invited members to raise any other matters for discussion in future meetings, noting that the intention is still to schedule time for discussion on data and an update on the wider data collection project for a future meeting.

Actions

• members to raise any other matters for discussion at future meetings