Rented sector reform: Housing (Scotland) Bill: business and regulatory impact assessment

Consumer Assessment

The impact of the measures assessed in this BRIA on consumers (in this case tenants) has been assessed through the following questions

Does the policy affect the quality, availability or price of any goods or services in a market?

With respect to the rent control measures, the approach taken in the Bill aims to help stabilise rents in areas where market rents have been increasing particularly steeply, whilst ensuring there can be a balanced approach that provides appropriate protection for the property rights of landlords. In areas where rent controls are imposed, a cap will be applied to rent increases, helping to make rents more affordable and predictable than they otherwise would have been.

Some stakeholders have raised concerns that rent control measures could impact on the quality of properties being offered to let, due to landlord concerns about the costs of maintaining property quality when rental income may be capped, or that the supply of properties may be reduced as a result of rent control and the cumulative effects of other rental reform measures, leading to higher rents in the longer term. However, as has been set out in detail above,^[143] the design of the rent control framework includes a number of flexibilities to mitigate such negative impacts.

The remaining measures assessed in this BRIA are also not expected to have a material negative effect on the quality, availability or price of any goods or services in a market. In fact, measures such as improved rights to keep pets and personalise their homes should help improve tenants’ experience of their rental housing, helping to make them feel more at home, which the evidence set out above indicates is crucial to tenants’ wellbeing. The changes to the method for assessing damages from an unlawful eviction will also give greater protection to tenants.

Does the policy affect the essential services market, such as energy or water?

No.

Does the policy involve storage or increased use of consumer data?

The rent control measures include a non-mandatory power for local authorities to contact tenants in rented properties to request information, in connection with their duties to carry out an assessment of conditions in relation to rent in their areas. There is no duty on tenants to provide this information. It would be the responsibility of the local authority to ensure that any consumer data that is collected in this way is appropriately and securely stored in accordance with legal requirements.

Does the policy increase opportunities for unscrupulous suppliers to target consumers?

No.

Does the policy impact the information available to consumers on either goods or services, or their rights in relation to these?

The Bill includes a duty on prospective landlords whose property is in an area where rent controls are applied to include expanded information in property adverts including the rent payable under the previous tenancy, the date of the most recent rent increase, and confirmation that the let property is in an RCA. It is intended that secondary legislation will be amended to require landlords in an RCA to provide similar information to tenants at the beginning of tenancies, to ensure that tenants in RCAs have the information they need.

New statutory notices and updates to statutory notices are likely to be required as part of the implementation of the rent control regime, and care will be taken to include information for consumers on their rights as part of these notices and in accompanying guidance.

It is therefore possible that rent control measures in the private sector may improve the availability of information available to consumers, although, as rent control measures will be applied locally where evidence supports their imposition, there will be a variance in the individual rights and processes available to tenants within and outwith areas where rent control is designated, although this difference will arise as a result of differential rent pressures between areas. For example, the ability of tenants with PRTs to refer a rent increase to a rent officer for adjudication will be suspended in an RCA, whereas this will continue to be an option for tenants in areas where rent controls are not applied. In most cases, both sets of tenants will continue to have a right to challenge rent increases, but in an RCA this will be a process of verifying whether a rent increase is above the level of the rent cap that applies, whereas outwith an RCA this will continue to be defined with reference to market rent.

There will also be differences between RCAs and other areas in terms of how soon a rent increase can take place after the beginning of a tenancy. These differences stem from the practical implications of applying rent controls to the setting of rent at the beginning of a new tenancy, and, overall, we do not consider that tenants will be disadvantaged by this difference.

Effective implementation of all rented sector reform measures will require a programme of awareness-raising and guidance for landlords and tenants on their changing rights and responsibilities under the measures and how to exercise and enforce them.

The package of reforms assessed in this BRIA will in general give tenants greater, and more clearly defined, rights.

Does the policy affect routes for consumers to seek advice or raise complaints on consumer issues?

The proposed private sector rent control measures will likely create some new or expanded routes for challenge in relation to compliance issues. Similarly, measures to provide private tenants with increased right to keep pets and to make changes to their home will create new redress routes to the Tribunal for tenants where tenants think that a landlord has failed to comply with requirements. These aspects are addressed below in the section on Enforcement, sanctions and monitoring.