Chamber and committees

I will pick up on the points about defining “quality” and “energy efficiency” that were raised by Maggie Chapman and which she discussed in her subsequent exchange with Graham Simpson. It is important to acknowledge that we are reviewing the EPC rating system. That could have happened way before now—it is long overdue—but we probably need to see what the review concludes before even beginning to look at the minimum standards that are required for a rent increase.

With regard to energy efficiency, as things stand, it is very hard for rural homes to do what is required to achieve an EPC rating of C. If the system used our current energy efficiency standards, it would be incredibly difficult for landlords with properties in rural areas to achieve that rating, which would prevent them from increasing the rent, so we need to look at the issue in the round. I am also a little concerned about how you would define “quality”, because it is very broad term that it is open to interpretation by individuals. I will leave my comments there.

Does the cabinet secretary agree that, should amendment 258 be agreed to, under the existing EPC rating system, it will be really difficult for landlords with rural properties to upgrade their homes to reach the required rating, given how the process is undertaken and assessments are made and determined?

Given that I have supported quite a lot of Willie Rennie’s amendments in this group, it would be remiss of me not to make a short contribution. I totally agree with the points that he has made. In our scrutiny of the bill, we must put in place the correct safeguards to ensure that we drive up investment so that the private rented sector, and other housing sectors, will not be detrimentally impacted by rent controls.

This might be another consequence of the Government not consulting properly in all areas before introducing legislation. I would have hoped that what happens between tenancies could have been teased out before we reached stage 2, because it was raised at stage 1 and even before then, not only by the sector but by members. I am pleased to support Willie Rennie’s amendments, and I look forward to hearing the cabinet secretary’s responses to all the amendments in this group.

I lodged amendment 102 to strongly show what my party believes should be contained in the provisions on exempt properties, in case my amendments to remove part 1 of the bill should not be agreed to. Of course, I lodged the amendment before the consultation on exemptions on rent controls went live.

The bill provides that

“The Scottish Ministers may by regulations define, for the purpose of section 9(3), what is an exempt property.”

Amendment 102 would alter the provision from “may” to “must”. I suspect that the cabinet secretary will ask members to vote down the amendment if pressed. However, I still have concerns about the process of exemptions, and moving the amendment provides me with the opportunity to put them on record.

Not including exemptions in primary legislation and setting them out in secondary legislation means that there will be fewer opportunities for MSPs to debate and expand the list of agreed exemptions following the conclusion of the exemptions consultation. At best, the housing sector, as it stands, will need to rely on the cabinet secretary deciding what exemptions are preferable, which means that some important options could be left out—although I hope not. That is why several colleagues have lodged amendments to this section of the bill. I do not believe that the provisions in the bill are the best way to move forward. I would have preferred to have seen exemptions in primary legislation, which would have given a stronger signal to the sector that protections from rent controls will be in place. Secondary legislation is also easier to amend.

I seek reassurance from the cabinet secretary that the issue of exemptions will be taken seriously and that all responses from stakeholders will be considered when the Scottish Government begins to scrutinise consultation findings. The sector needs clarity. I hope that the cabinet secretary understands how important this section is to the future of the housing sector and to securing future investment to build more homes.

The issues that we debated last week are also important. As Graham Simpson outlined, following last week’s committee meeting, I had the opportunity to meet the cabinet secretary and to have initial discussions on how we move forward with the legislation, particularly with regard to exemptions and other issues that were debated last week. We need to reflect on last week’s meeting as we move forward. The bill is complex, and it is important that the Government outlines its position on the issues that members raise at stage 2.

I go back to the exemption element of the bill. My party does not believe that rent controls are the answer. We need to ensure that all groups that will be impacted by the legislation are taken into consideration, and that includes those who provide homes in the private rented sector.

Amendment 103 ensures that social landlords or a subsidiary of registered social landlords are exempt from rent controls. I think that this amendment is a no-brainer, and I hope that social landlords will be at the top of the Scottish Government’s list for exemptions. Social landlords provide affordable housing to many people across the country, and, in the case of councils, rents are set by councillors. The rents accrued are usually placed into a budget that is invested in carrying out repairs, maintenance and aesthetic work relating to exterior and interior design, which benefits tenants as well as the reputation of councils.

To expand on the point that I have raised previously, my concern about exemptions is that, in many cases, the housing sector will need to wait until the consultation has concluded, the findings have been analysed and the results have been brought forward in a plan. That could further stifle development, which is not what we want to see. It is imperative that members think about that today when looking at exemptions and consider whether they believe that, out of the list of amendments before us, some of them have merit and could or should be included in the bill.

Amendment 106 complements amendment 103 by defining what registered social landlords and their subsidiaries are. Amendment 104 relates to an exemption from rent controls for properties with cladding or reinforced autoclaved aerated concrete. Again, this is a self-explanatory amendment, which complements my colleague Graham Simpson’s amendment, whereby landlords who incur unintended considerable costs to remediate buildings with cladding or RAAC should be exempt from rent controls. I lodged amendment 104 due to concerns that we have raised and had debates about in the chamber and in the committee. We still do not know how many properties are affected by those materials, and landlords will have to foot the bill to ensure that the properties are safe for tenants to use. The only way that some landlords would be able to recoup some of that money would be by raising rents at a sensible rate. Therefore, through this amendment, I urge the Scottish Government to consider such properties when looking at exemptions. I am certain that that aspect will form part of the consultation responses that the Government will receive.

Amendment 105 relates to the situation where landlords are carrying out works to make a property energy performance certificate compliant. Issues that relate to that have been discussed in the committee. Although we have yet to see what the EPC consultation will conclude, landlords are considering how best to improve their properties. Again, that work comes at a substantial cost, especially with regard to decarbonising homes and particularly in rural areas. Therefore, I hope that the minister is sympathetic to my amendment, which encourages landlords to act responsibly for the benefit of achieving net zero but that also demonstrates an understanding of the costs that are associated with that work. There is a consultation under way to review the EPC system. Although that is welcome, it comes at a conflicting time, given that we are considering the Housing (Scotland) Bill. It might have been better to have concluded the EPC consultation first, because that could form part of an exemption in this legislation.

Amendment 134 would create an exemption from rent controls for smaller landlords—for example, a landlord who has no more than two other let properties. The reason for the amendment is to ensure that smaller landlords do not continue to leave the market because of rent controls. This is a measured approach, and I hope to see it form part of the work that will follow the consultation.

Amendment 329K is another important exemption that the Scottish Government needs to consider. Charities such as Right There are working to prevent people from becoming homeless and separated from loved ones. It works alongside the private rented sector to secure homes and to prevent people from becoming homeless, and its end goal is to ensure that every person has somewhere safe to call home. As we have heard from other members previously, landlords are often demonised, but this is another exceptional example of work that they undertake to provide people with a home but also to work alongside our incredible charities who serve to help and support people who need that. I hope that the feedback that is received in the consultation includes that particular sector, as I would not want it to be left out of the list of exemptions.

On amendment 109—I will double check that I have not got ahead of myself. Yes, I went too far ahead. I will leave my remarks there, as I believe that I will come back in to talk to Edward Mountain’s amendments.

I move amendment 102.

We have known for some time that the Government was considering bringing rent controls into the sector, so why was the consultation not carried out prior to this stage of the bill? Will the cabinet secretary reassure the sector that the consultation will go on for only as long as it has to and that exemptions will be made clear as soon as possible?

I completely understand—

I turn to my colleague Edward Mountain’s amendments. Amendment 150 relates to Scottish ministers providing definitions of which properties are exempt within six months of section 13 coming into force. We need to have a measured approach that makes sure that exemptions for properties are brought forward within a suitable timeframe while also providing clarity to the sector.

Amendment 151, which has also been lodged by my colleague, would provide an important exemption in that it would exempt military accommodation from rent controls. Again, this exemption is a no-brainer and I hope that it will be in the feedback from the consultation.

Amendment 152 would exempt any property

“for which the tenant is an employee of the landlord.”

That will relate to many farms and rural dwellings, which should be taken into consideration. We need to make sure that family farms—or any farms—are thriving enterprises, so we need to consider exemptions in this area as well.

Like Katy Clark’s amendment 412, amendment 147 aims to allow repair works, improvements and any work relating to energy efficiency to be taken into account. The exemption would be calculated based on the level of work that is required. There is a strong argument for reference having to be made to the condition of the property, whether it is in a good condition or a bad condition, as that could provide an additional layer of protection for tenants. I am unsure at this point whether Katy Clark will move her amendment, but I think that she has indicated that she will not move it.

I am concerned by amendments 284 and 285, which will leave a loophole in the bill, as ministers will no longer have to consult the relevant local authorities, tenants and landlords on the form and level of the rent control measures that are being considered for proposed rent control areas. Amendment 285 will mean that, when designating a rent control area, ministers will no longer have to include the reasons for doing so, or the level of the rent control measure to be introduced in that area, in their report to the Parliament. That will remove an additional layer of protection from the bill, which would be vital should rent controls be put in place.

I also want to mention my upcoming amendment 107, which would remove exemptions. That relates back to the overall Scottish Conservative principle and stance that we are opposed to rent controls. It will be a bit odd to push for that amendment but to then talk about adding exemptions in subsequent amendments. However, given our overall position and stance, it is right that we try to remove sections on rent controls, but we recognise that, if rent controls are to be put in place, those exemptions would be an important part of the argument. There are certain areas that we want to be exempt from rent controls.

Of course, there is an on-going consultation on exemptions from rent controls. I have pressed the cabinet secretary to ensure that that consultation is concluded as soon as possible in order to provide reassurance to the sector.

We are in a housing emergency—I think that we all agree on that—and we need the private sector to bring in investment in order to build more homes. How are we going to tackle the housing emergency if we cannot have that investment in Scotland to build more homes and get people into them? Surely there is an argument that, if we build more homes, that will naturally reduce rents.

The cabinet secretary’s remarks have been really helpful, because we know that not enough data has been published—if it has been published at all—on these areas in the past. We need to ensure that the data is not only made available to MSPs to scrutinise but is put in the public domain, so that people have full transparency on what the market is saying and what information is being collected by local government. If there would be an opportunity for me to be part of the meeting with local government colleagues, I would certainly be interested in that.

I also wonder whether we can, as soon as possible, get a feel for what the simplified system will look like. We in Parliament often talk about high-level things, but, as Alexander Stewart and others have said, local authorities will have to administer the system, and we do not want to put a burden on colleagues who might not have the resource to do the work.