Private Rented Sector Stakeholder Engagement Group minutes: June 2023

Attendees and apologies

• Ashley Campbell (CIH)
• Caroline Elgar (SAL)
• David Melhuish (Scottish Property Federation)
• Emma Saunders (Living Rent)
• Henry Griffith (PropertyMark)
• Rhiannon Sims (Crisis Scotland)
• Scottish Government officials

Items and actions

Welcome

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

Actions and minutes from previous meeting

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

Update regarding Purpose Built Student Accommodation (PBSA)

The review of PBSA has now been completed, and the Working Group is developing some recommendations for Ministers.

There is broad agreement in principle on eleven recommendations, with continuing discussion about how best to take these forward if accepted by Ministers.

In general terms, the recommendations set out that:

• supply is a big issue for student accommodation
• building PBSA can be difficult because of planning issues – we continue to work strategically with local authorities, universities, students and PBSA providers to find solutions
• there are larger queries around tenant rights and whether PBSA should be subject to the same regulation as the mainstream PRS

The review is a discrete piece of work, taking place in parallel with the proposals set out in Housing to 2040 and the New Deal for Tenants, and on a longer timescale.

Any legislative requirements would likely need to be taken forward in future legislation rather than the upcoming Housing Bill.

However, it is accepted that there are connections with the mainstream PRS, given the majority of students live in the mainstream PRS from their second year onwards.

It is likely that the Group will be able to share more information on the recommendations in the autumn, after the summer recess.  

Update on the Housing Affordability Working Group

The Scottish Government remains committed to work with stakeholders to develop a shared understanding of affordability. It is accepted that almost all definitions of affordability have flaws. The working group is independent and sector-led, and  consists of stakeholders and experts from across the housing sector.

It is anticipated that the group will meet five times, with two of these meetings having already taken place.

The second meeting was focussed on design of a focus group, to understand:

• what people think affordability means
• what level is unaffordable
• people’s housing aspirations and whether these are being met

The focus group will seek views from struggling first time buyers, renters and those who are struggling to access the PRS.

Procurement for the focus group work is currently underway.

The working group’s third meeting will take place in September, to discuss the results of the first round of focus groups.

A follow-up round of research will then be conducted, to be reported to the working group’s fourth meeting, before the end of the year. The group will then develop their view on the shared understanding of affordability, to be finalised at a fifth meeting, and subsequently present their recommendations to Ministers.

The working group has established links with the Minimum Income Guarantee Steering Group and is keeping the Steering Group informed as work progresses.

It was acknowledged that the working group is another parallel workstream working alongside future rent control design, albeit working to different timescales.

Data collection

A brief overview set out some sources of existing data on rent and rent affordability:

• advertised rental data by Broad Rental Market Area (BMRA) is published annually by the Scottish Government for different property sizes and is used to inform local Housing Allowance and is based on 25-30000 records every year
• the same data is used to inform the Office for National Statistics (ONS) index of rental prices published each month. Caveat - The methodology used is not sensitive enough to robustly capture any impacts of the current rent cap in Scotland, and Scottish Government officials continue to liaise with ONS in relation to this
• in New Deal for Tenants the existing data on rent levels, affordability and household incomes is set out in Chapter 2 and Chapter 4 shows trends in rents comparing them with inflation, earnings, and household incomes
• recent research projects such as the Rent Better Research Programme funded by the Nationwide Foundation – to monitor PRS tenancies and includes surveys of landlords and tenants

The subsequent discussion covered:

• what are the gaps in existing data, and how can these be plugged?
• the need to consider deliverability (affordability and practicality) of any future data collection
• differences in different sets of PRS published data – published BMRA data is required to be fully representative of various locations and a variety of bedroom sizes, which may not be the case for published datasets from all sources
• consideration of inequality before and after housing costs – this requires survey data comparing individual household incomes vs housing costs, such as in the Poverty and income inequality statistics published by the Scottish Government
• distinction between data on new rents (currently collected by Rent Service Scotland (RSS)) and data on existing tenancies. Scottish Government published data from the Scottish Household Survey in their cost of living economics paper which although it only looked at two bedroom rents at a national level showed that the direction of travel in rents is similar for both
• whether further resourcing of RSS and/or local authorities might be needed for data collection – although noting that landlord registration system does not currently collect data on rents
• data available about what is happening in the wider housing market impacts, including how housing transfers between tenures
• data on trends in housing stock by different tenures can be seen in the Housing and regeneration outcomes indicators section on A Well Functioning Housing System and Availability and Choice. 

The following published data was also referenced:

• Scottish Government Quarterly Scottish Housing Market Reviews
• Scottish Government Housing statistics Stock by Tenure (with the note that there are some explanations and caveats as set out in the footnotes to the tables on the main category of PRS presented including rent-free households, and also that some of the latest figures presented for 2020 are not directly comparable to previous years due to impacts from the pandemic period on some of the survey data used)
• Scottish Government Quarterly figures on new housebuilding and affordable housing supply. (See also the latest Quarterly update publication). Whilst published figures on properties being built can distinguish between the number being built for social renting and affordable housing and those built for the private sector, it is not possible to break down figures to see how much private sector housing is being built for owner occupation and how much will be PRS.
• learning from the experience of Republic of Ireland around data and how they have implemented and enforced rent controls. In terms of rent data collection, Ireland have managed to achieve reasonable coverage of the PRS.  There will be lessons for us that once we have the data how it should be implemented, enforced and regulated

As part of the work we are developing on rent controls in Scotland – the Minister for Zero Carbon Buildings, Active Travel and Tenants' Rights has met with the Residential Tenancies Board.

Emerging proposals

High level emerging proposals were shared, with a view to gaining wide input and insight from Group members. These are not final proposals, and are shared as a starting point for discussions.

• it is important to ensure that local circumstances in relation to housing are taken into account, and local authorities are best placed to support this
• proposals include a requirement for local authorities to carry out an assessment of rent conditions in their local area and make a recommendation about whether they consider that the Scottish Ministers should impose rent controls in all or part of their area
• the intention is that the Scottish Ministers will be the final decision maker about whether to impose rent control, taking account of the evidence of the requirement and proportionality
• it is proposed that there would be statutory requirements around consultation before any measures can be introduced, and that regulations which implement rent control areas will be subject to Parliamentary approval
• the proposals being developed will support the ongoing, cyclical assessment of conditions in relation to rent
• the intention is that designation as an area subject to rent control will be time limited, with any re-designation being based on the outcome of further assessment of conditions
• where a rent control area is introduced, the intention is that there will be a restriction on the amount by which rents can be increased in that area
• in principle, the intention is that rent control will be applied both within and between tenancies
• although there are some similarities with the Rent Pressure Zone (RPZ) measures brought in by the Private Housing (Tenancies) (Scotland) Act 2016, the proposed measures include a mandatory requirement to assess rent conditions regularly which will cover the whole of Scotland
• this is a significant change of approach from the RPZ measures which were optional
• it is intended that the form of assessment will be clearly set out and transparent, and officials will be working with local authorities and the Local Authority Working Group on Rent Control to develop this, to ensure that Ministers have the evidence they would need to make a decision
• the expectation would be that local authorities would assess their whole area and, dependant on the outcome, could focus on any specific areas where issues are identified

Scottish Government are keen to work with stakeholders on the proposals and the guidance will be developed to support the assessment process and the criteria that will inform consideration of whether rent control should be recommended.

Officials would welcome members’ views and feedback on the high level proposals, as the start of an ongoing discussion.

Any other business

Members were encouraged to contact officials with any views or comments ahead of the next meeting.