Good afternoon. The first item of business is a debate on motion S4M-15365, in the name of Margaret Burgess, on the Private Housing (Tenancies) (Scotland) Bill.
I am pleased to open this stage 1 debate on the principles of the Private Housing (Tenancies) (Scotland) Bill.
I thank the Infrastructure and Capital Investment Committee for its scrutiny of and stage 1 report on the bill. The committee published its report last week, and I welcome its support for the general principles of the bill and the Scottish Government’s intention to create a clearer and simpler tenancy regime for the modern private rented sector that is fit for purpose.
I also thank the Finance Committee and the Delegated Powers and Law Reform Committee for their consideration of the bill and for their contribution to the lead committee’s scrutiny of it.
I am grateful to stakeholders and members of the public for their responses to the Scottish Government’s consultations, which helped to shape the policy content of the bill, and to stakeholders who gave their considered views to the committee.
The bill’s main purpose is to introduce a new private residential tenancy that will improve security and provide rent predictability for tenants, while providing proper safeguards for landlords, lenders and investors.
The new tenancy is necessary as the private rented sector now plays a vital role in meeting Scotland’s housing needs. It has more than doubled in size in recent years and is now home to around 700,000 tenants. We need a tenancy that reflects that change, is easy to use and works in today’s private rented sector. The Government recognised that when, in 2013, we published our strategy for the sector—it is the first strategy for private renting in Scotland and was developed in partnership with stakeholders.
As part of the strategy, we have already undertaken a range of actions to improve private renting. They include: clarifying the existing law on the charging of premium fees, so that tenants cannot be charged for getting a tenancy; setting up tenancy deposit schemes in Scotland to protect tenants’ deposits; legislating to create a new tribunal for private renting; legislating to regulate the letting agent industry; and providing local authorities with additional and enhanced powers to tackle bad practice, where it occurs.
However, to deliver the better-quality, more professional sector that we want, we need to do more. We need to rebalance the relationship between landlords and tenants, to achieve one that is fairer and which works in today’s private rented sector.
The new tenancy will be an open-ended tenancy. Tenants will no longer be asked to leave their homes simply because they have reached the end of the fixed term of their lease. Instead, landlords will use new grounds for repossession that cover all the reasonable circumstances that they might need.
The bill also includes provisions to make rents more predictable, with adjudication provided where individual rent increases take a tenant’s rent beyond the local market rate.
Local authorities will also be able to apply for rent pressure zone designation, where rent increases in a local area have a detrimental impact on tenants and housing.
I believe that the new tenancy and the provisions on rents will provide a step change in improving the quality of private renting by changing the relationship.
The minister will be aware that I asked some questions on the rent pressure zone during the committee’s evidence taking. She is aware that the rent increase would be limited to the consumer prices index plus 1 per cent. She is also aware that the CPI does not reflect housing costs. Is that not a bit of an anomaly?
Minister, before you reply, I advise members that I have asked for a sound check in the chamber. Members are finding it difficult to hear some of the contributions. Please continue in the meantime.
We are looking into David Stewart’s point, which he raised during the committee’s scrutiny of the bill. He has made the point, and the committee alluded to it in its report. As I said, we will carefully consider the stage 1 report and we will come back on the matter before stage 2. It is something that I am looking at. We use the CPI because it is a national measure—it is generally used for recording. However, we are considering what was said during the discussion on the matter, and we will come back on it.
As I said, the new tenancy and the provisions on rents will provide a step change in improving the quality of private renting by changing the relationship. That is not just my belief. The Scottish Association of Landlords is supportive of the principle and of the need for the bill, Crisis strongly welcomes the bill, and Shelter Scotland has given its full support to the bill’s core principles.
I recognise that landlords must have confidence in their ability to effectively manage and regain possession of their property. If they do not have that confidence, there is a risk that some of them could leave the sector. We do not want that, which is why it is so important to ensure that the grounds for repossession cover all the reasonable circumstances in which landlords might need to recover their property.
We have considered the grounds carefully, including looking at whether they should be mandatory or discretionary. Following our consultation, we increased the number of grounds from eight to 16. It should be remembered, however, that, in most cases under the current tenancy, it is tenants who end the tenancy, and I expect that to continue.
However, if a landlord brings a tenancy to an end and that is disputed, an application will need to be made to the new first-tier tribunal, which will provide a more accessible, specialist form of redress. I want to make it absolutely clear that landlords will need to provide evidence in support of an application, whether the ground is mandatory or discretionary. If the application concerns a mandatory ground, the tribunal will still need to establish whether that ground has been met before it can grant an order for eviction.
Sanctions will apply if a landlord misleads a tenant into leaving their home or the first-tier tribunal into issuing an eviction order. Some of those are set out in the bill, as they are specific to the new tenancy, but criminal sanctions, such as those for illegal eviction, will also continue to apply.
The Government will ensure that tenants are made fully aware of their rights. For instance, in the notices that the bill prescribes for the new tenancy we will include information about tenants’ rights and about where to seek advice.
The new tenancy will sit alongside the other work that we are doing to improve enforcement in the sector. We will publish new statutory guidance for local authorities on landlord registration to deliver tougher, more targeted enforcement, and we will continue to work with our partners, the Convention of Scottish Local Authorities and local authorities to ensure that the PRS is regulated effectively and robustly.
The committee’s report contains a number of detailed recommendations and comments, and it calls on the Government to consider and respond to them during the later stages of the bill’s parliamentary scrutiny. We are still reflecting on those at present, as I said in response to David Stewart, and I will set out our position on each of them in response to the report before stage 2.
I take this opportunity to briefly touch on one of the committee’s recommendations. The student sector featured heavily in the evidence that was presented to the committee, and I note the committee’s recommendation that we consider options for enabling tenancies to be set for agreed terms in purpose-built student accommodation. As I said, we are still reflecting on all the recommendations, and I am happy to give the issue further consideration.
I want to be clear that what we are proposing is an open-ended tenancy that should apply to all tenants in the sector. In the bill as it stands, students who rent privately will still be able to end a tenancy after nine months if they choose to do so. Landlords will still be able to advertise their property well in advance if a tenant has already given their notice to leave. The bill sets out a minimum period for that, but there is nothing to prevent such notice from being provided earlier. That is a matter of landlords and tenants communicating and engaging with each other.
A tenant can give notice as early as they wish if they want to be there for only a specific term, which will allow the landlord to advertise their property for holiday lets, festival lets or whatever. That is a different way of working that they will have to get used to, but there is nothing in the bill to prevent that.
The Government has undertaken extensive consultation and carefully developed the policy to ensure that we get the balance right. This is very much about getting the balance right. We have heard from some landlord organisations that we are taking the policy far too far and from other organisations that we are not taking it far enough. However, we think that we have got the balance right.
We want to create a better and more professional private rented sector. The new private residential tenancy that is set out in the bill is key to achieving that.
I move,
That the Parliament agrees to the general principles of the Private Housing (Tenancies) (Scotland) Bill.
I call Jim Eadie to speak on behalf on the Infrastructure and Capital Investment Committee.
14:40
I am delighted to be able to speak on the Infrastructure and Capital Investment Committee’s stage 1 report on the Private Housing (Tenancies) (Scotland) Bill.
The vast majority of the evidence that the committee received was in favour of the reform of the current tenancy regime. The Housing (Scotland) Act 1988 brought about the present system—I am sure that I am not alone in the chamber in thinking that 1988 seems like only yesterday; it is amazing how time flies when we are enjoying ourselves—but it was abundantly clear that it does not now reflect the requirements of a modern private rented sector. Although there was broad agreement on the need for reform, there was a range of views on what the nature of that reform should be. I will use my time to highlight some of the issues and the committee’s response.
At the forefront of the committee’s scrutiny was a focus on the Scottish Government’s core aim in the bill, which was to rebalance the relationship between landlord and tenant. That included the balance between the right of a landlord to regain possession of their property versus the right of a tenant to feel secure in their own home; the balance between the right of a landlord to recover rent arrears versus the right of a tenant to take their case to an independent tribunal; and the balance between ensuring continued investment in the private rented sector versus the right of tenants to challenge an unreasonable rent increase. Although the committee supports the general principles of the bill, in our report we make a number of suggestions to help to ensure that it strikes the right balance and that the proposals in it are proportionate.
A key area is, of course, the removal of the no-fault ground, which currently gives a landlord the right to end a tenancy once the initial rental period has ended. The new system will remove that arbitrary ground so that landlords will have to provide a reason for ending the tenancy using one of the 16 grounds that are listed in the bill. The committee recognises the concerns of landlords and their representatives, but six of our seven members agree with the removal of the no-fault ground.
Twelve of the 16 grounds are classed as mandatory, but for the other four grounds, the first-tier tribunal will have some discretion on whether the tenant should leave the property or whether a different action should be taken. In some cases, the mandatory grounds could require people to leave their home due to the fault of the landlord, such as the revoking of the house in multiple occupation licence, rather than because of anything that a tenant may have done to put their tenancy at risk. The majority of the committee therefore calls on the Scottish Government to give further consideration to the balance of mandatory and discretionary grounds or the degree of flexibility that is available to the tribunal.
Of all the issues that were considered, perhaps that of student and holiday lets generated most interest. In part, that was due to the significant role that students and tourists undoubtedly play in the private rented sector.
I learned a new acronym in our work: PBSA, which stands for purpose-built student accommodation. Its proponents were concerned that, by giving students the same security of tenure as all other tenants—a not entirely unreasonable proposition—the PBSA business model might be significantly weakened.
We listened carefully to those concerns as well as to the concerns of the landlords of more traditional student lets, who were worried about the perceived loss of flexibility in renting properties to students from autumn through spring, with holiday lets in the summer. Although we appreciated the intention behind having the same security of tenure for all those in the private rented sector, we nevertheless suggest that the Government look again at those specific issues. I note the minister’s assurances that the Government will look again at them, although she indicated quite clearly its wish to maintain its commitment to an open-ended tenancy.
Under the bill, the first-tier tribunal will have responsibility for ensuring that tenants are provided with a tenancy agreement and specified information. The tenant will also have recourse to the tribunal when they believe that their tenancy has been wrongfully terminated by a landlord who has used one of the 16 grounds for eviction referred to earlier under false circumstances. I note that the minister wrote to the committee, through me, earlier this week to outline that the tribunal is expected to start hearing cases from December 2017.
The committee agrees that measures should be in place to ensure that landlords evidence an eviction through proper procedure. It also agrees that providing an opportunity to challenge wrongful evictions will assist security of tenure. Some members thought that the three-month penalty payment associated with wrongful termination might not be sufficient to deter wrongdoing by a landlord, so we call on the Government to consider whether that reflects the financial impacts elsewhere, such as the costs to local authorities for homeless applications and the need for tenants to pay a deposit elsewhere, as well as the emotional distress caused to the tenant.
We also seek clarity from the Government on what support and legal assistance would be in place for those taking their case to the tribunal, whether third parties would be able to take cases to the tribunal on behalf of tenants, and whether the tribunal would be able to adjourn cases. Our recommendation on third parties asks whether that would be possible with the full involvement of the tenant.
We welcome the proposals to apply restrictions in relation to rent, including allowing only one rent increase per annum with three months’ notice and the ability to challenge excessive rent hikes through rent service Scotland and the tribunal. In particular, the committee feels that those measures will assist tenants to plan their finances to deal with future rent increases, and prevent rent increases from being used as a lever to evict tenants.
On allowing local authorities to apply to the Government to designate areas as rent pressure zones where rents rise excessively and where the council will be able to apply rent caps, the committee notes that the measure is intended to be a discretionary tool for local authorities to target problem areas. The committee, however, requests clarity on specific aspects, including how the bill will ensure that investors are not dissuaded from investing in rent pressure zones and how it will prevent landlords from inflating rent increases between tenancies.
I thank all those who provided evidence on the bill, whether they were highlighting an issue on behalf of landlords or on behalf of tenants. I put on the record my thanks to my fellow committee members; it was, as ever, a real team effort and a pleasure to work with all my colleagues on the committee.
On behalf of the Infrastructure and Capital Investment Committee, I look forward to the Scottish Government responding in full to all our recommendations and setting out further changes to the bill at stage 2, and I commend the committee’s report to the Parliament.
14:48
I begin by drawing attention to my entry in the register of interests. On behalf of Scottish Labour, I thank the Infrastructure and Capital Investment Committee for its stage 1 report, the Finance Committee and the Delegated Powers and Law Reform Committee for their scrutiny, and the various stakeholders and witnesses who have supported the process.
This debate is taking place in the context of the housing crisis facing Scotland. An independent report that was published last year by Shelter Scotland concluded that this country needs 12,000 new affordable homes every year if we are to meet housing need. Scottish Labour welcomes the bill, because it is clear that the private rented sector has a role to play in meeting housing need. However, it is important that renters get a fair deal. Figures from the Scottish Government show that, in 2014, around 14 per cent of households lived in private rented accommodation. That equates to roughly 330,000 households, 290,000 of which rent from a private landlord and 40,000 of which rent from family and friends.
Since 2001, the private rented sector has more than doubled in size, while the proportion of owner-occupied housing has declined slightly. That may have been caused partly by the economic downturn and the difficulty that potential home owners now experience in securing a mortgage, but there may be other factors—such as job insecurity or the need to move around to find work—that make renting a more attractive option for some people.
Younger households in Scotland are now more likely to live in the private rented sector than in any other tenure. The 2014 Scottish household survey reported that the percentage of households with a 16 to 34-year-old highest income householder that live in the PRS has increased substantially from 13 per cent in 1999 to 41 per cent in 2014, to the extent that that is now the most common tenure for those households. Compared with other tenures, private renting households are more likely to be single adults or households with two adults and just over a fifth of households in the PRS are families—a proportion that has been growing in recent years.
The figures also show us that around 94,000 housing benefit claimants live in the private sector. That is one fifth of the total number of people in receipt of housing benefit. Figures from 2014 show that the average weekly housing benefit award was around £64 a week in the social rented sector and around £89 a week in the private rented sector. That indicates the level of public funding that goes into rents in the private rented sector.
The private rented sector is often the only option for homeless people. In its evidence to the committee, Crisis recognised that the PRS
“can be a viable housing option, even for vulnerable people, with the right support and safeguards in place. At present, however, there are serious problems: the sector is not fit for purpose and there are long-standing issues around security, affordability, conditions and access.”
It went on to say:
“The provisions have the potential to significantly enhance security of tenure for tenants and put in place measures to protect tenants from excessive rent increases.”
In a 2013 paper calling for greater security for private tenants, Shelter Scotland argued that there was a need to review the procedure for rent increases,
“with consideration of starting with an initial market rent put up by an inflationary index or contractually agreed amounts ... at agreed points during the tenancy.”
During stages 2 and 3 of the Housing (Scotland) Bill in 2013, many amendments were lodged to introduce some form of rent control, but those were not agreed to. James Kelly MSP lodged an amendment that would have required the Scottish ministers to make regulations specifying the maximum amount that rents could be increased by at each review. In response, the Minister for Housing and Welfare, Margaret Burgess MSP, rejected the amendment, arguing that the matter had not been consulted on and that such measures would need
“full public consultation on the basis of clear proposals”.—[Official Report, 14 May 2014; c 3068.]
Since then, the Scottish Government has issued two consultation papers on proposals to reform the current private tenancy regime. The first consultation sought general views on rent levels and whether the Scottish Government should take some kind of action. The second consultation paper outlined the Government’s intention not to introduce general controls on rents but sought views on whether there was a need to introduce limits on rent levels for sitting tenants in hot-spot areas.
In the context of that consultation process, campaign groups have been expressing opposing views on rent regulation. The living rent campaign has been campaigning for some kind of rent regulation “to curb excessive rents.” It has argued:
“Decent, affordable housing is an essential human right, and policy around rents should reflect that fact. We believe that rents are generally too high, with Scottish tenants spending on average nearly a quarter of their income in rent. In Edinburgh the average tenant spends half of their income on rent. The number of Scottish households in poverty in the PRS has doubled in the last decade, and high rents are one of the main reasons for this situation.”
The living rent campaign points to practice in other countries that links rent charges to standards and housing quality. On the other hand, the PRS 4 Scotland campaign is concerned that the introduction of rent controls and the removal of the no-fault ground for repossession
“carry a significant risk of hindering investment in the sector, while dis-incentivising small and large landlords from participating and/or maintaining their properties to a high standard. The consequence of this will be a drying up of supply and a more limited choice for tenants, as well as depleting the quality of Scotland’s housing stock.”
The bill seeks to introduce a new tenancy for private tenants, replacing the existing assured and short assured tenancies. The new tenancy will apply to all future lets. In relation to rent increases, the bill proposes that rent reviews should take place no more than once in any 12-month period; tenants should receive 12 weeks’ notice in advance of a change in the rent; and, if a tenant considers that any proposed rent increase would take their rent beyond rents charged for comparable properties in the area, they will have the ability to refer the increase for adjudication to a rent officer at rent service Scotland.
No national rent controls will be introduced. As the policy memorandum to the bill states, national rent controls
“could jeopardise efforts to improve affordability through increasing supply by discouraging much-needed investment.”
Under the bill, local authorities will be able to apply to the Scottish ministers requesting that all or part of their area be designated as a rent pressure zone. In making their application, a local authority will be required to satisfy ministers that rent increases for sitting tenants in the area to be designated are rising excessively, causing hardship to sitting tenants in the area and having a detrimental effect on the broader housing system. Ministers will be able to make regulations that will designate a rent pressure zone and specify the percentage that should be used to calculate the rent cap.
Scottish Labour believes that every person in Scotland should have a safe, warm and affordable place to live in. We have argued for some time that the private rented sector in Scotland needs to work for everyone. Therefore, we welcome the Government’s bill, which works towards that. We will continue to look at the bill closely as it progresses through Parliament to ensure that the system that is in place for private tenancies in Scotland works for everyone.
14:55
As has been said already, the private rented sector has become an important part of the rented sector. It now produces the houses that are needed for many people who are unable to find them in the social rented sector or through other affordable tenancy methods. As a result, any change in the legislation must take into account the requirement to ensure that that sector remains of adequate size to cope with demand or, better still, that investment is attracted into the sector in order to expand it and provide greater availability of housing through the sector.
For that reason, it is essential that as we, in the words of the minister,
“rebalance the relationship between landlords and tenants”,—[Official Report, Infrastructure and Capital Investment Committee, 2 December 2015; c 2.]
we do not do so in a way that will disincentivise investment.
There is organisational consensus that there is a need for the current tenancy regime to be overhauled. For that reason, when I spoke to representative organisations during the process that led to the introduction of the bill, I always encouraged them to be as engaged as possible and to get involved in the consultation because only by being involved could they understand the process that was taking place and, at the end of the day, ensure that we deliver legislation that suits the needs of landlords as well as tenants.
However, I am disappointed that, at this stage, the bill—much-needed though it is—is not quite in a form that I am able to accept. The convener of the committee made it quite clear that, on the subject of the removal of the no-fault ground, one of the committee members did not agree with the rest. I hold my hand up and admit that it was me. A good case was made by those who gave evidence for the retention of the no-fault ground. No one is suggesting that you should simply be able to throw people out of a tenancy for no reason. However, the no-fault ground has served tenants and landlords well during the time that it has been in use. The reason for that is that it often covers situations in which it is impossible to achieve viable objectives by other means. That relates specifically to a number of cases that have been drawn to my attention relating to antisocial behaviour.
Will the member give way?
I am sorry, but I only have five minutes. I must persevere.
It is true that there is a strong mandatory ground in the bill that concerns antisocial behaviour. However, to get someone evicted on the basis of antisocial behaviour, the landlord requires witnesses. In how many cases is a neighbour willing to give evidence against someone if the result of a failure of the proceedings will simply be further antisocial behaviour and, perhaps, intimidation?
Will the member give way?
No, thank you.
I believe that the no-fault ground for removal has been successfully used in those circumstances and that removing that ground will simply make life more difficult for many tenants who are already in difficult circumstances.
Much has been said already about student tenancies. There is a quite specific investment model being used for the production of large amounts of additional student accommodation around Scotland and particularly in Edinburgh at the moment. It is a grave concern of mine, and of others in the committee, that if we do not find a way to allow that nature of investment to continue, we will have difficulty attracting investment in future. I am glad that the minister is giving the matter further consideration, and I look forward to hearing about the outcome of that in the future.
There are a couple of areas in which I share the committee’s concerns, including the sanctions for wrongful termination. I believe that three months’ rent is not adequate as a penalty for those who wrongly use the rules, and I am prepared to consider any changes that may take place in that area as long as we do not go the opposite way and become penal rather than overly lax.
I am afraid that you must come to a close.
I have the rare opportunity to speak again at the conclusion of the debate, and I will complete my remarks at that stage.
I apologise, but we are already over time. Members’ speeches must be no longer than four minutes, please, or I am afraid that I will have to cut them short.
15:00
I am pleased to hear that Mr Eadie has been enjoying himself since 1988. I have been enjoying myself for much longer than that.
Before I go on, I draw members’ attention to my entry in the register of members’ interests, which notes that my wife owns two houses that she rents to tenants. They have lived there for many years and we think of them not as tenants but as neighbours and friends. I am sure that the feeling is reciprocated.
As I am a tenant myself, in my Edinburgh flat, and as I have managed and maintained property in my previous business life, I have experience on all sides of the sector. I do not believe that we can consider the bill properly without first understanding the context. The private rented sector has more than doubled in the past decade and banks are still not lending to many of those who aspire to home ownership, although they have lent profusely to this profitable and therefore fast-growing sector. We must also remember that we are dealing not with private rented property but with people’s homes, that a decent home is a fundamental necessity and that peaceful enjoyment of a decent home should be a fundamental right in any civilised society.
Unfortunately, the data tells us that that is not always the case—otherwise, why would more than 70 per cent of tenants stay in their private rented homes for less than two years, why would over 18 per cent of homeless applications come from the sector and why would rents in some areas have increased so significantly when interest rates have never been lower?
There cannot be a member of this Parliament whose casework does not include many instances of landlords failing to maintain their properties to tolerable standards while ignoring the requests of tenants to carry out vital repairs, leaving tenants without heating over long periods in the winter, for example, and punishing those tenants who complain with eviction or threats of eviction. That situation cannot be allowed to continue. Equally, though, we must be mindful that it would not be helpful to disregard the needs of landlords, because, as we have heard, that would run the risk of deterring necessary investment in the provision of much-needed housing.
There is an overall and significant shortage of housing, which is why the Scottish Government has met its manifesto pledge to deliver 30,000 affordable homes in the current session of Parliament and why it has already given a pledge to deliver 50,000 affordable homes in the next session.
Will the member take an intervention?
I am sorry, but I am really short of time.
There were some who doubted our ability to deliver 30,000 affordable homes. It is testament to the competence and the credibility of this Government that I hear no one now doubting our ability to deliver 50,000 over the next session.
Will the member give way?
I am sorry, but I am short of time.
The bill needs to strike a careful balance between the needs of tenants and the needs of landlords, and I believe that it does so. It gives landlords the right to terminate tenancies in legitimate circumstances and the right to make reasonable rent increases. It gives both landlords and tenants the ability to take cases to the proposed tribunal when that is necessary, and it introduces the simpler and clearer private residential tenancy, which affords benefits to both landlords and tenants. It also provides the opportunity for councils to make application to the Scottish ministers to introduce rent caps in rent pressure zones.
You must draw to a close.
I am winding up, Presiding Officer.
I am afraid that you must finish now. Your four minutes is up, Mr MacKenzie.
I believe that the twin aims of good investment and the provision of good homes are not mutually incompatible, and I support the general principles of the bill.
15:04
I thank the Minister for Housing and Welfare and the Government for holding this debate on the Private Housing (Tenancies) (Scotland) Bill. I was pleased to see the Government introduce a bill that relates to the concerns of those in the private sector. It is right that the Government legislates to protect tenants but does not legislate in a way that hinders landlords. The principles of the bill will achieve that, but there are areas in which it can be improved.
I am a member of the Infrastructure and Capital Investment Committee, which considered the bill. Broadly, I welcome many of the proposals in the bill and efforts to work towards a more cohesive relationship between landlords and tenants but, having heard evidence from a number of interested parties during the committee’s consideration, I will take this opportunity to say where the bill does not go far enough to protect the rights of tenants.
The bill proposes 16 grounds to allow landlords to recover their properties. Of the 16, 12 are mandatory and four are discretionary. As recommended, the no-fault ground is not one of them. I hope that, as a result of that, tenants will be empowered to speak out about unsatisfactory property conditions without fear of repercussion. They will be more secure in the knowledge that they will not have to fear a short notice period at the end of their tenancy. Quite simply, it is wrong that a family could have their home and security pulled out from under them with no cause or reason.
With the withdrawal of the no-fault ground, it is important that landlords and tenants alike are able to have confidence in the fairness of the proposed new tribunal system. The minister has said that the new system will be delayed until December 2017. I would welcome further comments on that in her closing speech, as the new system is key to the success of the bill. I am surprised that she did not mention it more in her opening remarks. It is incumbent on the Government to ensure that tenants are adequately advised on navigating the new system. When the committee took evidence on the bill, Shelter Scotland was right to ask what advice, assistance and legal representation would be offered to low-income and vulnerable tenants. Furthermore, Crisis Scotland asked what fees would be required to access a tribunal. As with access to any other aspect of the law, finances simply should not come into it. At the time of the committee’s evidence taking, the minister did not offer an opinion on whether legal aid should be provided or confirm whether tenants would face financial charges for going to a tribunal. It is critically important that those questions are answered.
In its evidence to the committee, the Scottish Government argued that the 16 grounds covered “all reasonable circumstances” for recovery of property. However, the committee was not so sure and recommended that the Government should consider whether the bill’s penalties to deter landlords from terminating tenancies falsely are sufficient. Many advocates for vulnerable people felt that the grounds were unbalanced in favour of the property owner. The Govan Law Centre gave particularly scathing evidence to our committee, saying that the grounds were
“the equivalent of giving a tenant a zero-hours contract on their home”.—[Official Report, Infrastructure and Capital Investment Committee, 18 November 2015; c 27.]
The living rent campaign believed that elements of the bill were skewed in favour of the landlord and suggested a hardship provision to empower tribunals to delay repossession of a property, to allow for alternative resolutions.
Having spent some time on the Parliament’s Equal Opportunities Committee, it would be remiss of me not to mention the equalities concerns about the initial six-month tenancy period that were raised during the committee’s consideration of the bill. The living rent campaign argued that tying tenants into a six-month contract could present “serious equalities issues”. If someone is required to pay for a property even if they no longer live in it, it could hinder their attempts to leave an abusive relationship. In its recommendations to improve the bill, the Infrastructure and Capital Investment Committee concurred with that and encouraged the Government to allow those in abusive relationships to leave their tenancy without fear of financial penalty.
The bill is a good start at tackling the problems that are inherent in the private rented sector, but the Government should, in the interests of good governance, seriously consider the points that have been made on the bill by the committee and members on all sides of the chamber.
15:08
I, too, am a member of the Infrastructure and Capital Investment Committee, and I thank our convener, Jim Eadie, other committee members and the clerks for their contribution and support during stage 1 consideration. I also thank the stakeholders who gave the committee written and oral evidence, which informed and enhanced our deliberations: the National Union of Students Scotland, Shelter, Citizens Advice Scotland and Citylets, to name but a few. In particular, I want to highlight and say thanks for the contributions of small landlords—some of whom have one or only a few properties—who took the time to express their concerns and their general support for the principles of the bill.
The bill is all about striking a balance in a sector that is hugely important to Scotland’s housing needs. We have moved some way towards finding a balance that is fair and proportionate to tenants and landlords and that achieves the overall aim of improving security of tenure for tenants while providing appropriate safeguards for landlords, lenders and investors.
I look forward to the Government’s response to the stage 1 report. The report highlights a particular concern that I have about the six-month initial tenancy: the plight of someone who has entered into that arrangement and then finds themselves the victim of an abusive relationship. Being liable for a six-month period may put financial pressure on someone to remain in a home where they are at risk. I thank the people who contributed to the evidence-taking session that highlighted that important matter, particularly COSLA’s representative, Harry McGuigan. However, an exception only in that area could be open to abuse, and I ask the Government to consider what might be changed at stage 2 to protect vulnerable people in that situation.
Life can throw the most difficult and unexpected events at us. I am concerned that, not only in cases of domestic abuse but in other circumstances, the six-month tenancy could tie people to a property that, whatever the circumstances might be, it would be in their best interests to move from. I remain interested in the six-month initial tenancy, so I look forward to the Government’s response to the concerns about it that the committee highlighted.
I will discuss some of the concerns that others have mentioned in the debate. On Alex Johnstone’s one about the removal of the no-fault grounds for ending a tenancy, if someone behaves antisocially and causes distress to neighbours and, perhaps, the landlord, it is reasonable that they be evicted on those grounds, not on a no-fault basis. The bill holds the correct mechanism to allow people to take such cases to the tribunal and to ensure that, when they end a tenancy on that basis, they do so in accordance with the provisions in the bill. It will also protect the rights of landlord and tenants.
The bill will improve security for tenants. It will not be possible to ask them to leave their home simply because their tenancy agreement has reached its end date. The bill is comprehensive and robust on grounds for repossession—the minister has said how far she has moved on those—and provides an opportunity for local authorities to introduce rent caps. It is a balanced bill and I look forward to continuing with it to stage 2.
15:13
I draw members’ attention to my entry in the register of members’ interests.
I welcome the general principles of the bill. I also welcome the ICI Committee’s stage 1 report. It highlights the need for more information and a wider, more robust set of data, which is still to be considered. I thank the committee and the clerks for the report and congratulate them on all their hard work.
Protecting the flexibility of the private rental market and its ability to develop and improve must not interfere with our responsibility to provide all the necessary safeguards and legal protection for tenants and to improve their security of tenure. Before I discuss specific provisions in the bill, I will highlight a key fact that is the driver of varying opinions on many of the bill’s provisions: the need for a sufficient supply of housing, which currently does not exist.
Regardless of what we say on rent controls, having enough suitable accommodation for students or holiday lets, the fact is that we face a housing shortage. The ICI Committee noted that point, and I strongly support the calls for Government updates on increasing housing supply across all tenures.
Although we all want an increase in the number of homes, it is our responsibility to bring our rules and laws up to date in the meantime. The removal of the no-fault ground is a progressive development, but its replacement with 16 other grounds—mandatory, partially discretionary and one fully discretionary—should be examined more closely.
For the benefit of both the tenant and the landlord, Homeless Action Scotland noted:
“The proposal for many of the grounds for repossession to be ‘mandatory’ could result in a ‘tick box’ exercise which does not allow for anomalous cases to be handled in a sensitive and sensible way”.
Therefore, I look forward to seeing what information the Government can provide, as per the committee’s recommendation that further thought should be given to which of the grounds for repossession should be mandatory and which discretionary.
Similarly, on the topic of rent controls in rent pressure zones, I am wary of adopting a measure that in the long term has proven harmful in other cities around the world. Among the most serious unintended consequences of applying rent controls are actual inflation in rent costs, the removal of investment in homes and, of course, the removal of homes from the so-called market. We know that rents in some areas are expensive; for example, the variation in Edinburgh between summer and the other seasons has a free-market effect on short-term rents.
However, restricting the market’s ability to self-regulate could reduce investment in the sector at a time when that might be needed and could, in turn, result in self-regulation in the direction of higher prices. Such a situation could be truly dangerous to manage, with a very limited supply of housing on the one hand and, on the other, an inability among suppliers to set a market price, which could lead to the effects that have been experienced in other places. The more serious situations found in Stockholm, San Francisco and Washington DC provide evidence of rent controls inflating rent costs, because the maximum annual rent rise becomes the standard annual rent rise—and currently, of course, a rise of CPI plus 1 per cent, or indeed CPI plus anything, as has been recommended, is actually an above-inflation rent rise.
The Law Society of Scotland has highlighted the opaqueness of the consultation process, and it believes that only overwhelming evidence should justify the creation of a rent pressure zone. I also welcome Shelter’s view that tenants should be given a reasonable time to pay any accumulated arrears.
In conclusion, I reiterate my support for the bill’s general direction. I want to see tenants in Scotland get extra security of tenure, but we still need to examine many provisions in the bill in more detail.
15:17
As a substitute on and ex-member of the Infrastructure and Capital Investment Committee, I am delighted to have this opportunity to speak in the debate. My colleagues have already talked and will no doubt continue to talk about the bill, but this gives me a chance to talk about the Scottish Government’s record on housing and about the important part that the bill will play in continuing to improve the lives of those who live in rented accommodation, be that in the social rented or the private sector.
It is no coincidence that since the Tories began the sale of council housing 36 years ago we have seen a marked decline in the volume of low-cost affordable housing, and it is a shame that the Labour Governments that followed, both at Westminster and here at Holyrood, did nothing to address the issue. Thankfully the Scottish National Party Government has done the right thing and ended the destructive right-to-buy policy, a move that has helped local authorities across the country to have the confidence to build council houses once again.
Since 2007, despite the extremely harsh financial climate and the on-going Tory austerity agenda, as has been stated, the Government has exceeded its target of building 30,000 affordable homes by March 2016. We have invested a record £1.7 billion in housing, delivering 20,000 homes for the social rented sector and creating 8,000 jobs per year in the hard-pressed construction industry. As has been said, the SNP has made it clear that, if re-elected, we will build 50,000 more homes, supported by a financial commitment of £3 billion, a proposal that has been supported by Shelter Scotland and the Scottish Federation of Housing Associations.
We have well outperformed previous Administrations, with £135 million being invested through the council house building programme. Since 2009, this Government has built 5,350 council houses, compared with the six that were built in the previous Labour and Liberal Administration’s last four years in power. We are also outperforming the rest of the UK in building affordable homes, with 85 per cent more per head spent on social housing than in England and Wales.
Cathcart is perhaps behind only Sandra White’s Kelvin constituency in the number of private landlords and tenants that it has and, although most landlords behave impeccably, without a doubt there are a number who take advantage of their position, and there are tenants who feel that they do not have the requisite protections. The bill, if passed, should help that situation considerably.
Let me give a recent example of someone who came to one of my surgeries. He stays in a granny flat that has no hot water and which suffers from dampness and numerous other failings. He has learning difficulties, and he has only now started to get the support that he needs. Thankfully, his support worker came along and we are now on the case, so I hope that his housing situation will be dealt with. However, that kind of situation will be much easier to deal with if the bill becomes law.
In my constituency, we also have a number of ambitious building programmes. Cathcart and District Housing Association has recently repurposed the site of the old Holmlea school, which has lain empty for 15 years, in the hope of having social rented housing there in the near future. The site of the old Victoria hospital is currently being disposed of by the national health service, and the local community councils and the local community have already started to engage with the NHS on the type of affordable housing that they would like to see there. I suspect that many of the tenancies there will be in the private rented sector. Cassiltoun Housing Association is another one that has been doing great work, and it is building on the site of the old Castlemilk east church.
In the little time remaining, it would be remiss of me not to mention the great work being done by our Minister for Housing and Welfare, Margaret Burgess. Her drive and commitment are well recognised throughout the housing sector and beyond, and it is clear that the experience that she gained from her previous existence in the third sector has made her determined to ensure that she does all that she can to help as many people as possible to live in housing that is fit for the 21st century. She should be congratulated on that and on the Private Housing (Tenancies) (Scotland) Bill, which I am delighted to support at this stage.
15:21
As a member of the ICI Committee, I am pleased to be able to take part in this debate. Clearly, I support the bill’s general principles, but I have a few issues with the bill that I want to raise with the minister.
As we have heard, the private rented sector is a very significant sector, with 330,000 Scottish households and around 85,000 children. Significantly, 120,000 of those households are in poverty, so it is important that we discuss that issue today. The Chartered Institute of Housing has said:
“There should be no circumstance where a person or family can lose their home without reason.”
Within the short time that I have, I will cover three areas in which I have a particular interest: tenants’ rights; rent pressure zones; and an issue from my region around farming housing.
On the bill’s handling of tenants’ rights, the introduction of a less intimidating and less adversarial tribunal system rather than a court system is to be welcomed. However, I would encourage more in respect of the tribunal’s powers with regard to reasonableness, which is a very important test. The current proposals would grant the eviction of a vulnerable tenant who has a month’s rent arrears after just three months; personally, I would support an extension of that period to six months, and would support the tribunal having more discretionary ability to adjourn cases and monitor vulnerable tenants’ progress case by case. Perhaps the minister would kindly comment on those key issues when she winds up.
Further, should a tenant be evicted by a landlord on false grounds, which obviously involves breaking the law, the current penalty, as we have heard, is a maximum and not definite sum of three months’ rent. Compared with the £50,000 penalty that a landlord can face for falsely renting with an HMO licence, that seems to me to be unbalanced and not proportionate.
Turning to the issue of rent, I warmly welcome the changes that the bill proposes of allowing rent to be increased only once during a 12-month period, which will bring stability to both tenants and the market. The proposal to introduce rent pressure zones has been met with mixed reactions, but I support the bill’s proposal on that. Local councils, which would trigger the measure, are best placed to assess whether a zone should be an estate, village, town, city or, indeed, the whole local authority area. The zone would restrict rent increases to the CPI plus 1 per cent for sitting tenants. I raised a technical point on that with the minister earlier, to which she responded.
I would contend that rent pressure zone policies are not the only tool in the toolbox. I refer members to best practice around the world in that regard in places such as Stockholm, San Francisco and Amsterdam, where rent increases also tend be linked to increases in the quality of housing, which makes a lot of sense. Generally, the evidence that I have heard from across the sector is that there is consensus that the biggest issue in Scotland concerning rent is the lack of available social and private housing. For our report, the ICI Committee heard, as the convener said, that in certain German cities rent pressure zones are effective because they have double the number of properties available compared with the number available in the average Scottish city.
You are in your final minute.
Thank you very much, Presiding Officer.
Briefly, on the farming housing issue, if a farm property is needed for an employee, it is sometimes very difficult to supply it. I will perhaps raise that technical detail with the minister in writing.
Finally, I agree with Unison Scotland’s view that most of the grounds for repossession under the bill are mandatory and only three contain minimal tests for reasonableness that protect the tenant; and that all grounds should be discretionary and subject to the test of reasonableness, with rights of appeal and adequate redress. As Govan Law Centre has said, the 16 grounds for repossession could form a kind of zero-hours tenancy.
15:24
I am pleased to speak in the debate as a non-member of the Infrastructure and Capital Investment Committee. Although I am supportive of the bill, I am mindful of the recommendations that the committee outlined in its stage 1 report, which I welcome. This week, I have read the report of the Resolution Foundation entitled “State of working Scotland: living standards, jobs and pay”. The report includes an interesting section on housing mix that shows that, in that regard, the biggest change in Scotland in recent years has been the rise of private renting, which has increased approximately twofold since 2001-02. It is therefore right to recognise the importance of the sector and the need to review the system of tenancies.
As the minister and members have highlighted, one of the Government’s core principles in the bill is that all tenants, including students, should have the same security of tenure. As a member for a constituency with a large university, I have to say that that is an issue. I have received a significant amount of correspondence from landlords and letting agents in St Andrews regarding their generally negative perception that the bill will affect the student accommodation sector in the town. They argue that it is beneficial for many students, especially those who do not reside in the locality of the university, to have accommodation arranged prior to the commencement of their studies. As I understand it, the proposed new system would preclude landlords from advertising properties until a tenant has indicated an intention to terminate their tenancy.
I understand the Government’s view that landlords in the student rental market
“may ... need to adjust their approach to managing their property”,
as there may be a shorter window for advertising and letting property in that market. I accept that. In addition, I accept the argument that
“Effective engagement with tenants can help mitigate this, for example by agreeing the date at which the tenant intends to leave in advance of formal notice being given.”
Furthermore, I understand the Government’s argument that only a small proportion of lets may continue beyond the expected end date, as students are unlikely to want to pay for the accommodation unless they plan to stay over the summer. Of course, if students stay over the summer, landlords will still benefit from the rent income.
I am also mindful of the comment from the National Union of Students Scotland that
“It is not in the student’s interests to not say that they will be leaving because they do not want to get lumbered with loads of debt for rent that they cannot afford to pay.”—[Official Report, Infrastructure and Capital Investment Committee, 4 November 2015; c 37.]
Notwithstanding all that, there is still a war to be won to win over some dissenting voices on the issue.
I am pleased that the committee has recommended that purpose-built student accommodation should be treated in the same way as university accommodation and could be exempted from the bill in the same manner. I welcome the minister’s earlier comments on that issue.
The reason why some landlords fear the removal of the no-fault ground is that they have little confidence in using the court system. As a member of the Faculty of Advocates, surprisingly, I understand concerns over delays and costs, and I understand those who have concerns about the court process being too adversarial. Accordingly, I welcome the proposal for a first-tier tribunal, but I believe that greater clarity is needed on exactly how it is supposed to operate. I heard the reference to tenancies from December 2017 and I have no doubt that, in due course, the Government will provide further information on that point. We should be cautious about providing legal aid as a matter of course. The Government would be wise to think further about how best to deal with issues of third-party representation.
That brings me to the matter of grounds for repossession. As I understand it, the Government has listened to the concerns of landlords by extending the number of grounds for repossession from eight to 16, 12 of which are mandatory and four of which are discretionary. I think that the balance is about right. I welcome the penalty provisions in relation to wrongful termination, although I take on board the concerns about how that can be properly evidenced.
I welcome the general principles of the bill and I wish it well.
15:29
The bill’s two primary objectives are to rebalance the relationship between landlord and tenant by ending the no-fault ground for repossession and to take some action on excessive rents, which I certainly know all about here in Edinburgh. On the former, there are different views. Landlords are saying that it goes too far, whereas Shelter, whose views I have often followed over the years, welcomes the measure as a step forward on tenancy security. Shelter says that the bill will enable tenants to speak to landlords without fear of retaliatory eviction, which is certainly a big problem now and has been in the past. The Govan Law Centre, by contrast, argues that there is little change, because all the grounds are, in effect, mandatory.
The balance between mandatory and discretionary grounds for ending a tenancy is therefore a key area for further debate. The committee recommended that the Government take a further look at the matter. I am sympathetic to the view that all tenancy terminations should be subject to a reasonableness test.
Much will depend on the effectiveness of the new tribunal and how easy it is to access. Legal aid is one of the issues that will have to be looked at in that regard. The functions and operation of the tribunal will be in regulations, and the sooner we see those, the better. There are three changes that I would like to see. I hope that local authorities will be able to make applications to the tribunal, as they can do to the Private Rented Housing Panel. I hope that there will be tougher sanctions for illegal evictions than are currently in the bill, and I hope that there will be an amendment to allow early termination of a tenancy in the context of an abusive relationship.
Landlords have expressed concerns about the bill, and it is only right that we take such concerns seriously. The committee shared some of the main concerns to do with students and holiday lets and recommended that the Government look again at those issues. Given the complexities, the Government should follow that recommendation. There will be further discussion at subsequent stages.
Some of the landlords’ concerns might be shared by the wider public. For example, there is fear of an unintended consequence in that landlords might be more selective about the tenants that they take on. We will have to keep an eye on that. The public might also share landlords’ concerns about antisocial behaviour. We know that many of our constituents are concerned about the difficulties that landlords in the social rented sector have in evicting tenants when there has been serious antisocial behaviour. The committee’s recommendation is that the matter be reviewed post-implementation, but it might well need to be considered during the passage of the bill.
Finally, on rents, there should be a minimum of three months’ rent arrears before eviction proceedings, as Shelter recommended. On excessive rents, the Government proposal that rents should change only once a year is a good one, as is the provision for referral of a rent increase to the rent officer. There should also be a power to refer initial rents to the rent officer, because there is no provision for new or sitting tenants to challenge the existing rent; the focus is on only the rent increase.
Rent pressure zones should help in Edinburgh and other places, but there must be good evidence before the designation. There are legitimate fears that rents could be put up in the period when designation is being considered, as well as between tenancies, because another problem is that the proposals affect only sitting tenants.
The bill makes a good start and represents significant progress, but I hope that it will be subject to amendment during its passage.
15:33
I think that most members know that the constituency that I represent, Glasgow Kelvin, has within its boundaries the University of Strathclyde, the University of Glasgow, Glasgow Caledonian University, City of Glasgow College and lots of other further education institutions, so I have a particular interest in student accommodation. I am pleased that the bill provides for the same security for students in the private rented sector as is provided to other tenants in that sector. That is very welcome.
There is a large amount of purpose-built student accommodation in my constituency. The sector has mushroomed over the past couple of years, and there is concern in my constituency about the amount of student accommodation that has been built or is proposed. I note the committee’s recommendations in that regard and the comments of its convener, Jim Eadie, and the minister. I will keep a close eye on the issue to do with tenancies that last for an agreed term. I wonder what the approach would lead to in areas such as Hillhead and the merchant city, where the sector is booming and there are thousands of student flats.
As James Dornan said, the private rented sector is a large part of the housing sector in my Glasgow Kelvin constituency. I echo the living rent campaign’s comments that the bill will strengthen the rights of and protections for tenants as well as including provisions on the introduction of rent controls in high-pressure areas. I welcome those rent controls and am interested to see how they will be rolled out throughout the area.
Malcolm Chisholm, Siobhan McMahon and James Dornan talked about repairs and where tenants can go if they want to take their complaints to a tribunal. In my constituency—I presume that it happens in other members’ constituencies, too—many people who come to me are living in horrendous conditions and, when they complain to their landlord, their tenancy is ended in two or three weeks and they are put out. It is good that those people will get the opportunity to take their complaint to a tribunal; they can feel a bit safer that they will not be put out.
Tenants can be antisocial, as Alex Johnstone said, but sometimes it works both ways and people have been put out for what would not be called antisocial behaviour. There are good and bad landlords, and there are good and bad tenants. The bill covers that by allowing tenants to go to a tribunal or arbitration. I know that, in rented accommodation—[Interruption.]
Keep going. We have lost the clock but you have another 30 seconds.
Arbitration sometimes works for people in social rented accommodation. That is a good idea and worth looking at because, along with the tribunal, it will make the situation much better. [Interruption.]
I will stop you there, Ms White. We need to suspend Parliament until we get the power problems sorted out.
15:37 Meeting suspended.
I call Patrick Harvie. Sandra, I think that you have probably said enough for the time being. [Laughter.] Thank you, but you were just about to close.
Brutal, Presiding Officer.
I am grateful for the opportunity to contribute to the debate, although I regret that we are doing so once again without having seen the Government’s response to the stage 1 report. I recognise that, on this occasion, that is more to do with parliamentary timing than any delay on the part of the Government, but nevertheless it is a bad habit and we should correct it for the future.
Members have talked about the growing importance of the private rented sector when many people are finding owner-occupation unaffordable and social housing unavailable. I regret that so many people are left in that situation but if the private rented sector is to continue to grow and if it is so important, we have to recognise that it is more than just a normal financial transaction.
Mike MacKenzie described good housing as essential to life and Jayne Baxter described it as a fundamental human right. I agree with both descriptions. If we are serious about this issue, we must recognise that it is not just about a financial transaction. A house’s purpose is to provide a home for someone; its role as an investment is very much secondary to that—it is the means, not the end.
That being the case, all housing is social. All housing is intimately connected with people’s quality of life and their health and wellbeing. All housing is part of a community. All housing is essentially social and all owners have social responsibilities. I think that we are moving in the direction of recognising that. The bill is not the first word on the subject and it will not be the last word. I hope that we will continue to debate how to make it stronger as it goes through Parliament.
During the few moments of debating time available, I want to raise the issue of rent control. The first time that I discussed that with the minister I was told in no uncertain terms that the Scottish Government had no intention of introducing rent controls and that it was just not going to go there. I very much recognise and welcome the fact that the Government has moved its position since those days. Many of us, both inside and outside the Parliament, campaigned and pushed on that issue and made the case for rent control—and I think the case will continue to be made for a stronger version of rent control than is currently in the bill.
On the grounds for eviction, particularly wrongful termination of a tenancy, some measures in the bill allow a former tenant to complain that although they were subject to an eviction on one of the legitimate grounds, those grounds were used in a misleading way. For example, a landlord might have put a property on the market at an absurdly inflated price and then put it back out to rent, just so that they could bump up the price. Alternatively, a landlord might have changed their intentions and decided that they no longer wanted to move into the property, which was the reason given for ending the tenancy. When wrongful, misleading reasons are given for ending the tenancy, it should not be down to the tenant or the former tenant to know that that has happened and to produce evidence of it after the fact; there should be a stronger means of ensuring that such misleading uses of the eviction grounds do not become normal. Third parties might have a role to play there, as they do in other parts of the bill, so I hope that we will explore that.
One of the final grounds for eviction is that a
“Landlord has ceased to be registered”
by the local authority. That is entirely the landlord’s responsibility and I see no reason why a tenant should lose their home in such circumstances. It seems far more appropriate that a property of that nature be subject to a management order and that it be brought under the management of a responsible landlord such as a social landlord.
Those are some of the various areas in which I hope that we will continue to explore changes that could be made to the bill during our further scrutiny of it.
Excellent. Many thanks. I call Alex Johnstone, who has up to four minutes.
15:42
I resume where I left off. Jim Hume covered quite a bit of the issue of rent control in the same way that I want to cover it. I take this opportunity to back Jim Hume’s concerns.
Some people perceive rents to be rising apace in Scotland, but the statistics show that rent levels are relatively stable across Scotland and in some areas they are actually falling. How do we get confused about that? People measure different things in different ways. If we look at advertised rents for vacant properties we may be able to identify an increase in the rents that are being demanded, but in reality rents on the ground might be changing in a different way or at a different pace. For that reason, as Jim Hume said, it is of concern that sitting tenants whose rents have not been rising might find themselves subject to a legally imposed agenda whereby their rents will rise. The effect might be that rents that have been stable will begin to rise by the annual increment.
Does the member accept that the rent capping that is being proposed could take place only after an investigation to prove that there was in fact a significant problem with rent rises? If rents were not rising to an absurd extent, no such cap would be imposed.
I am suggesting that rents that were not rising may now rise by the amount that is allowed. That may do tenants a disservice.
Briefly covering the issue of rent pressure zones, and going back to what I said early in the process about investment, we can be sure that, if a shortage of private rented housing in an area is significant enough to require a local authority to consider moving towards a rent pressure zone, the minute that that designation is brought in the area will become an investment black spot. It will make things worse in the longer term. The impact should be considered carefully.
Another subject that was discussed, which I will cover although it has been covered by others, is the issue of freeing up property if it is required by an employee. That has very specific implications in rural areas and the farming industry, of which I have direct experience. Many have expressed the view that, if we were to lose the power to get houses back when required, that would have an impact on people in the rural community.
The other thing that I have experience of—in fact, I have done it myself although it is not ideal—is houses being deliberately kept empty if it is known that they will be required at some point in the future. If houses in rural areas are being kept empty as a precautionary measure, and not being let, we are missing an opportunity and losing houses that we could otherwise have the advantage of.
At 5 o’clock tonight, the Conservatives will vote against the general principles of the bill, but that is not to say that we might not come into line and support it at some time in the future. The Government needs to be courageous. It needs to stand by the principles that it has set out in some areas, but it needs to have the courage to change the bill in other ways.
This is all about balance. That balance is in danger and has not been entirely achieved yet. It could be, but the Government must work for our support at stage 3.
I am told that the lights will gradually return.
15:47
I thank all colleagues for their contributions in what has been a measured and relatively thoughtful debate. I particularly thank Sandra White for her perseverance and her willingness to take on the chin the Presiding Officer’s less than supportive comments.
We are primarily here today because of dramatic changes to housing tenure in Scotland over the past decade and a half—dramatic changes that reflect an on-going housing crisis. Unfortunately, under the SNP Government, only 28 per cent of young people now own their own homes; that is down from 48 per cent in 1999. Many stay with their parents for longer, and far greater numbers end up renting privately as they cannot afford a deposit. There are 150,000 Scots on local authority waiting lists and, unfortunately, the private rented sector is not always a positive choice for many and is not only used in a transitional period before eventual home ownership. It is the most expensive and least secure option, but it is often the only option that is available.
Will the member give way?
I will make a little progress, if I may. With more Scots relying on more expensive and less secure tenancies, it is perhaps not surprising that it is the most vulnerable who have been hardest hit: students, those on lower incomes and the homeless.
The living rent campaign points out that almost one in five of all homelessness applications now come from people in the private rented sector, which is a rise of 38 per cent in the past five years. The Joseph Rowntree Foundation states that a quarter of poor households now live in the private rented sector, which is up from one in 10 a decade earlier.
I thank Shelter and the NUS in particular for leading the make renting right and living rent campaigns, which have led us to the bill. Their high-profile campaigning on behalf of vulnerable and often exploited individuals has made it impossible for the Scottish Government not to respond.
It is also worth acknowledging, as my colleague Jayne Baxter did, the Labour Party’s efforts on the issue. Labour has campaigned alongside the NUS, Shelter and others to flag up the problem of rip-off rents in Parliament and has presented solutions in the form of legislative amendments, even if the Scottish Government and the minister chose to reject the proposed approach two years ago. I am pleased that the minister has now accepted the need to restrict rent rises in the private rented sector and to introduce a much more secure tenancy that will finally end no-fault eviction. We can broadly unite around those proposals.
There are still several issues to resolve as we enter stage 2 of the legislative process. Jim Eadie, who is the Infrastructure and Capital Investment Committee’s convener, and Malcolm Chisholm mentioned the committee’s concerns about the balance between mandatory and discretionary grounds for eviction. Clare Adamson flagged up the serious worry that a six-month initial tenancy period might work against those who are fleeing domestic abuse. I look forward to hearing the minister’s response to the committee’s report.
I admit to having been a bit worried about the minister’s approach when I heard that only an hour and a half was set aside for this afternoon’s stage 1 debate. A bit like Patrick Harvie, I noted that we do not have the Government’s response. That did not strike me as an accurate reflection of the importance of the sector or of the bill to Scotland.
I was even more worried to find out just yesterday that one of the most important aspects of the bill—the involvement of first-tier tribunals—has been postponed until the beginning of 2018. Like my colleague Siobhan McMahon, I was surprised that the minister did not spend more time on the issue in her opening remarks, given how central the tribunals are to the bill’s operation and to the interpretation of discretionary powers in particular. Does that mean that the bill will not be implemented until that time, or will that affect just certain sections of the bill, such as those governing letting agents?
Several members, including committee members, have raised on-going concerns about students and holiday lets. The minister has said that she will give those matters further consideration, although she wants to be able to do so while remaining with one tenancy type. I hope that I understood her right. I was slightly confused about that, because Rod Campbell heard the same remarks, but I think that he interpreted them as meaning that there would be an exemption, as is the case with university accommodation. I would welcome clarification from the minister on that. From Labour’s perspective, we do not believe that students should be treated as a different category of tenant, although we think that their interests and those of landlords can and should be met through further discussion and negotiation.
Labour welcomes the move to limit rent rises to once a year, but it is difficult to know what to make of the Government’s proposals on rent caps in pressured areas. That is worrying those in the sector, who believe that uncertainty, a lack of clarity and greater risk are putting off investors. I believe that the minister said that she wants a better and more professional PRS. It is not unreasonable, then, for the sector to ask for clarity on the data that local authorities will need to compile to use the new powers. For example, will data be collected over existing broad rental market areas or by using local authority boundaries?
Investors want to calculate the risk. They want to know how likely it is that the new powers to control rents will be used. They are being assured that it is highly unlikely that they will be used, but that leaves many of us wondering what the bill is designed to achieve. I do not wish to sound overly cynical, but it seems that the Scottish Government wants to look as though it is putting rent controls in place without actually doing so.
The bill builds on proposals that were initially put forward by Labour, and we will support it, but the answer to difficulties in the private rented sector, as with Scotland’s housing crisis more generally, is a straightforward one: build more houses. I suggest that the minister should adopt more policies that Labour has proposed and build the 60,000 affordable homes that are required to meet assessed need—not the 50,000 that the SNP has proposed. She should make 75 per cent of those homes for social rent, and she should make the dream of home ownership a reality again with our £3,000 boost to savers.
We are very tight for time. I call Margaret Burgess to wind up. You have up to eight minutes, minister. Less would be more, please.
15:53
I am grateful to members for their contributions. I will start with the point that Ken Macintosh finished on. There is absolutely no doubt and no disagreement that the answer is to increase the supply of housing across all tenures. We are committed to doing that with our 50,000 houses. We have said that 75 per cent of those will be for social rent. We have exceeded our 30,000 target in the current session, and we have assisted 20,000 people—or a good percentage of those people—into low-cost home ownership, in addition to our help-to-buy schemes. We announced a further £160 million today to help people into home ownership. Let us not pretend about it—we want to help people into home ownership, too.
The Private Housing (Tenancies) (Scotland) Bill is about security for people in the private rented sector. A number of members made the point that it is about people’s homes. It is about landlords having to accept that what they are doing is providing a home for someone. With that comes responsibilities, and tenants have a right to feel secure in their home. The bill is about rebalancing that relationship.
We heard Alex Johnstone say that we are taking things too far one way, and there have been suggestions from Labour that we are not taking things far enough. This is about getting the balance right. I am still listening and I listened closely to the points that have been made.
Rod Campbell referred to the point about student accommodation, which I said that we would look at. I am considering investment in purpose-built student accommodation, but I have made it clear that, in student lets overall, I would very much like to see an open-ended tenancy and not to see students treated differently from anyone else in the private sector. That is an important part of the approach. Landlords might have to adjust the way in which they engage with their tenants. That is important, and that approach has wide support. I want to be clear on that.
I will mention a couple of other issues that have been raised. A lot has been said about the operation of the first-tier tribunal. I appreciate that people are uncertain about that, as the tribunal is not up and running yet. I will do all that I can to ensure that the tribunal system works effectively. It is part of the overall Scottish tribunal system; it does not sit on its own in the bill or in housing.
The tribunal is still being established and it will be independent. We cannot seek to influence its decisions or issue instructions or guidance to it. However, we are aiming for a system in which legal aid is not the norm. We have to say that because, otherwise, why would we remove the matter from the courts and have a separate system? The system will be much more informal. It will involve housing specialists as well as legal specialists. People will be able to go on their own or with an organisation or representative, whether or not that is a lay representative. In some cases, people might require legal representation.
I have said more than once that I would not propose such a tribunal system if I did not think that tenants could access it affordably. This is not about creating a system and saying to tenants, “We’re giving you these rights, but we’ve created this other system, and you cannot actually access your rights.” I want to be absolutely clear on that.
I thank the minister for her comments. She knows that she has our support in introducing a tribunal approach to resolving tenant difficulties but, if the tribunal will not be up and running until 2018, does that mean that certain parts of the bill will not be implemented until then?
I will have to come back to Ken Macintosh on the timescale for when the bill will receive royal assent and start to come into place. Off the top of my head, I cannot say that the bill will take effect from a particular date, but I will have that information for him at stage 2. The powers that are to be transferred to the tribunal under the Housing (Scotland) Act 2014 will still be transferred; that will happen in stages. I do not see that being an issue for the bill, but I will certainly come back on that before stage 2, or directly to the member.
The Government will consult more widely on the tribunal system.
On the tribunal issue, the relevant year is 2017, not 2018.
Will people be asked to go to arbitration before anything is done about antisocial behaviour? Will that be the first port of call?
As I said earlier, we will not be able to dictate to or direct the tribunal on the evidence that it will need to look at.
We are clear that any ground whatever for repossession will have to be evidenced by the landlord. There will not be a tick-box exercise on anything. On antisocial behaviour, there will be discretion for the tribunal to look at its extent and nature. Sometimes that can be subjective. The tribunal will decide on the merits of each case. It is appropriate that there should be a due process when seeking to evict people from their homes, who can include families who privately rent.
The tribunal will consider a range of evidence, although it will not necessarily have to call witnesses, neighbours or stakeholders. It will determine what evidence it requires and decide whether that is sufficient to support applying the sanction of evicting someone. We must have discretion to cover antisocial behaviour.
We are looking at the robustness of the other grounds. A few people have mentioned the ground of having one month’s rent arrears in a three-month period. I am looking carefully at what the committee’s report says on the matter, but we have to balance that with the fact that, if someone falls into three months’ rent arrears, that will be a considerable amount of money that will be difficult to repay. I am keen that people should be told early about where they can go for assistance if they fall into arrears, so that they do not find themselves losing their home because of that if it can be prevented. That will become part of the stage 2 discussions.
We have discussed student tenants. I am also looking at the points that Alex Johnstone and David Stewart made on employees in rural areas, and we are talking to rural stakeholders. However, we have to balance their concerns with consideration of whether it is right to put a family out of their home. We are talking about homes. If someone comes into a rural area to fill a job, a family in that area who perhaps have their children at a rural school may be asked to move. We have to get the balance right; at the moment, I am not convinced that what is suggested is a ground for repossession, but we are still discussing that.
I am running out of time. I am encouraged by what I have heard in the debate and by the broad support for the bill. I will consider the recommendations and I look forward to further discussions as we reach stage 2.
That concludes the stage 1 debate on the bill. Before we move to the next item of business, I apologise to Sandra White if my treatment of her was less than gracious. I also apologise to the chamber for the poor-quality lighting that we are enduring. I am told that it will gradually restore itself, so I intend to press on, with members’ approval.
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