Private Rented Sector Stakeholder Engagement Group minutes: November 2023

Attendees and apologies

• Anna Gardiner (SLE)
• Aoife Deery (CAS)
• Caroline Elgar (SAL)
• Stuart Oag (SPF)
• Emma Saunders (Living Rent)
• Rhiannon Sims (Crisis Scotland)
• Ronnell Reffell (UK Finance)
• Scottish Government officials

Apologies

• Callum Chomczuk - Chartered Institute of Housing

Items and actions

Welcome

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

Actions and minutes from previous meeting

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

Plans for the transition out of the Cost of Living emergency rent control measures

Officials provided a high level summary of the proposals for the transition out of the Cost of Living emergency rent control measures:

• the eviction moratorium and rent cap currently in place cannot be continued beyond the end of March 2024
• the Scottish Government is considering how best to use the regulation-making power in the emergency Act to temporarily reform the current rent-adjudication process to support the transition once the emergency rent cap is suspended or expired
• the Scottish Government would anticipate that many landlords would propose reasonable rent increases which will go ahead without challenge.
• the intention is to use the powers to ensure that tenants do not face unreasonably steep rent increases
• one proposal, which is being considered, would be a tapered approach which would smooth rent increases
• the Scottish Government is planning for a consultation on the details of the proposed approach in early December

Members raised the following queries and concerns:

• How would the tapered approach account for cases where rent has not been increased for some time?

The Scottish Government is conscious that there may be a gap between open market rents and rents which have been capped, and recognises that tenants who have had their rents capped could be faced with very large rent increases (depending on where they are in Scotland) – the use of these measures is intended to prevent very high increases for particular households all at once.

• In the absence of centralised data for tenants to refer to, is there a danger that tenants may refer smaller, more reasonable increases for adjudication?

Annual PRS statistics are aggregated at BRMA (Broad Rental Market Area) level for different bedroom sizes; in individual cases it would be for the rent officer to consider comparable properties, which has always been the case for private residential tenancy rent adjudication cases. Communication will be key to make the changes as clear as possible, and to make clear that this is not a continuation of the rent cap.

• How will the taper work, and will it reflect when the rents were last increased?

The proposal is to restrict some increases by a particular percentage calculated by reference to the taper.

• Is there a danger that this will penalise landlords who have not increased rents as frequently as others?

The tapered approach would reflect the current rent for the property which is based on the previous choices of the individual landlord, however, it does still take account of market rents.

• Acknowledging that large rent increases could be unfair to tenants, will the taper prevent landlords from ever returning to market rent?

The proposed measures are under the powers set out in the emergency legislation, and will therefore not be permanent changes. As rent adjudication only applies to rent increases within tenancies, the proposed temporary amendments will not prevent landlords from considering market rents for new tenancies if they choose to do so.

• A concern that current market rent can be unaffordable for some tenants, and are concerned that landlords may try to put rent up as much as possible knowing that the Scottish Government has committed to longer-term rent controls. Some members would like to see an element of discretion in rent adjudication cases.
• A concern that landlords may seek to carry out illegal evictions to allow a higher rent to be set with a new tenant – noting that these are covered under existing legislation, but that they feel that clearer penalties and easier access to justice are needed.
• Concerns expressed that, if measures are not presented in a balanced way, landlords will leave the sector and this may impact on supply.
• Members agree that there should be measures in place to deal with unprofessional landlords, but expressed concern about potential to drive out landlords, and to impact provision of new stock such as newbuild PRS in Scotland.

While we appreciate that different landlords may react in different ways, the current landlord registration data does not show an overall decrease in PRS properties at the Scotland level (although noting that there are some limitations with this data). [Post meeting addition: The landlord registration data shows an increase in PRS properties of 4,751 (1.4%) from 339,525 in January 2022 to 344,276 in October 2023. There are however differences at the Local Authority level, with more rural Local Authorities showing a decline in PRS properties, whilst others are showing an increase, based on analysis of data between January 2022 and August 2023.]

• A concern that the current rent adjudication process is seen as cumbersome, and whether there is up to date data on the use of the process and the outcomes (whilst agreeing that communication and awareness-raising will be key).

The existing rent adjudication process was suspended as part of the Cost of Living emergency measures (from October 2022 onwards). While Rent Service Scotland will have data concerning how many applications were received before the emergency measures, it is possible that this may not be comparable to those which will apply after the emergency measures are expired.

Further feedback on stakeholder engagement questionnaire

An update was given to members:

• the engagement exercise closed on 27 October 2023, and received over six thousand responses
• the Scottish Government is currently undergoing a tender exercise in respect of the analysis of the responses
• analysis will consist of a quantitative report on the questionnaire responses, as well as a qualitative analysis of the written responses received
• members will be updated once a date for publication has been agreed

Any other business

• Members queried whether the eviction moratorium would come to an end at the end of March 2024. Scottish Government officials clarified that the emergency eviction moratorium cannot be extended beyond that point, although it is anticipated that there will be transitional measures to take account of applications already in progress through the First-tier Tribunal systems.

Annual PRS statistics

• Scottish Government analytics colleagues flagged that the annual Scottish Government Private Rental Sector statistics will be published on 28 November 2023. These are the statistics which will be used to lift Local Housing Allowance rates back to the 30th percentile, following the UK Budget Announcement last week.

Call for Evidence

• The Scottish Government’s next three-monthly report on the operation of the Cost of Living (Tenant Protection) (Scotland) Act 2022 is due to be laid before the Scottish Parliament by 14 January. This report will cover the period 01 October to 31 December 2023. A call for evidence in respect of this report was issued on 20 November 2023, and members are invited to submit any comments or evidence by 11 December 2023.

Rental reform proposals – consideration of costs

• The Scottish Government is continuing to consider the proposals for further rental reform, and is currently engaging with stakeholders to consider potential costs as part of our statutory engagement.

Renters’ rights campaign

• The Scottish Government is planning to re-run the ‘Renter’s Rights’ campaign, with a specific focus on the end of the emergency measures, the transitional amendments to rent adjudication and protections against unlawful eviction. Marketing colleagues are keen to engage with Group members, and would be particularly keen to hear any stories of individuals successfully exercising their rights under housing legislation.