Chamber and committees

We confirmed fairly recently that we intend to introduce that legislation as soon as we can after the summer recess this year.

There are a number of areas where there is a clear public expectation from stakeholders about the provisions in the plan, particularly around homelessness prevention. Through the new deal for tenants, we have also signalled a number of other areas where we expect to make progress. It talks about not only the development of a national system of rent controls, but other tenants’ rights—for example, some of the softer things that give people a sense of dignity at home, such as the ability to personalise their home or to keep pets. We have also talked about some of the more challenging issues, such as protection from eviction during the winter months. The legislation that we will introduce to Parliament later this year will address a number of those measures as well as others.

It is important to flag up the recognition across political parties of the value of the approach that is taken in “Housing to 2040”. It is also important to flag up that the approach involves not only developing plans extensively with stakeholders and the public, but trying to create a long-term vision for the role that housing plays in meeting wider policy objectives for people in Scotland. That includes tackling poverty and inequality, creating and supporting jobs, looking at issues around demographics and depopulation and the work on our hugely important targets for emissions reduction and net zero. Between the housing bill and the heat in buildings bill, we will address all aspects of that.

As I think that we discussed with a number of members in the debates in the Parliament during the bill’s passage, there are connections between the emergency measures in the act and the Government’s longer-term work through the new deal for tenants and the commitment to a new housing bill later this year.

However, although there were strong expectations of the emergency legislation, which delivered important necessary protection, it could not deliver everything that people wanted from longer-term legislative reform, particularly the protections around rent levels, which relate to in-tenancy rent increases and do not apply to the setting of rents for new tenancies. That issue is well understood through the debates on the legislation that we have had.

Longer-term work on rent controls is on-going. We are keen to engage with the sector, by which I mean landlords and tenant interests, as well as academics who can bring expertise on the way in which the housing rental market works. We are doing that work in line with our commitment to the ethos that is set out in “Housing to 2040”, which is that the right to adequate housing is a human right. We will have a great deal more to say on that in due course.

The principal bridging mechanism between the emergency legislation and our longer-term work is the power to alter the system of rent adjudication. If we were to move directly from the emergency measures by switching them off entirely at some point in the future and go back to open market comparisons for rent adjudication, there would be severe and unintended consequences. Therefore, in due course, we will announce proposals on how we intend to use those powers in the act.

A longer-term argument can obviously be had—it has played out in the chamber on a couple of occasions—about whether a regulated approach to private renting is compatible with continued investment. Our view, which is also acknowledged in the report on rent control by the cross-party group on housing, is that regulated markets can be attractive to investors. Indeed, we regularly make that case in relation to the long term.

If we consider the history of the devolved approach to housing, for example, we have seen a very substantial increase in the size of the private rented sector at the same time as continued improvements in the robustness of regulation. We therefore do not believe that there is a fundamental contradiction between having a well-regulated sector that strikes appropriate balances for tenants’ rights and continued investment in the sector.

On current data, it is more of an administrative than a statistical source, but the Scottish landlord registration scheme shows that 340,149 private rented properties were registered in Scotland in December 2022, which is slightly more than the 339,632 that were registered in August, before the introduction of the rent cap. I was told just yesterday that we have now seen the figures for January, which are roughly the same—they are still very slightly, albeit not significantly, up on the August figure.

Of course, there will be those who suggest that there is an intention among landlords to leave the private rented sector at some future point. It is fair to say that we hear that in Scotland as well as south of the border. Some of the push factors there have involved tax changes that the UK Government has pursued, which impact on landlords’ profitability throughout the UK. There are severe challenges in the housing system throughout the UK, and severe challenges to affordability. We believe that it is necessary and achievable to strike the right balance between protecting tenants in relation to affordability through regulation and ensuring that we have continued investment in housing supply.

As I said in my opening remarks and reinforced to the convener, we believe that we have struck a balance that achieves a degree of parity. Private rented sector rents are significantly higher than social rented sector rents. A 3 per cent increase in the private rented sector is broadly equivalent to an impact of £5 a week—or thereabouts—in the social rented sector, if we look at the most common property type, which is the two-bedroom property. Obviously, there will be slight variations for one-bedroom, three-bedroom and four-bedroom properties, because we cannot apply that average at a uniform level. We would need to control each rent individually to achieve that, but setting that 3 per cent cap achieves something that is broadly in parity in monetary terms.

I reinforce the point that the additional safeguard for landlords is there. If they face additional prescribed property costs during the specified period, they can apply for an increase of up to 6 per cent through Rent Service Scotland. I think that that strikes the appropriate balance between tenants and landlords, who will in a significant number of cases face significant challenges through the cost of living crisis.

On average, tenants in the private rented sector tend to have lower incomes than those in other tenures. They tend to spend a higher proportion of their income on their rent and are facing a number of other challenges. We believe that the legislation strikes the appropriate balance, going forward.

I am aware of Shelter’s criticisms, and I would very much welcome having further dialogue with it and, indeed, with other agencies—I know that Citizens Advice Scotland has been discussing the same issues—and hearing their ideas about what more we can do.

That said, I draw attention to the significant amount of work that we have done as we have developed the new deal for tenants and in our particular focused activity around the 2022 act. I am talking not just about conventional news releases and other activity across conventional media but about a wide range of social media content. For example, the renter’s rights website has been updated and advertised widely, and we have made wider cost of living information available through general practice surgeries, libraries, community centres and leisure centres. That information has included numbers and contact details for organisations that can offer individual advice and support, not just generic information about the legislation’s provisions, and of course it includes Shelter and Citizens Advice Scotland.

There has also been direct communication through key partner organisations such as tenant and landlord representative bodies, social and local authority landlords and educational establishments, giving tenants the information that they need about the new legislation and telling them how to access more information, should they need it. We have also had direct communication with registered landlords via local authority text message alerts and with registered letting agents, and there has also been engagement with the three tenancy deposit schemes to facilitate dissemination of information to tenants who are registered on their newsletter. There have also been direct messages to an extensive list of stakeholders, including colleges, universities and purpose-built student accommodation providers, confirming the nature of the measures and giving information for tenants.

As I have said, though, we continue to be very open to further suggestions about what more we can take forward on this. I know that, particularly as changes come through, landlords as well as tenants will continue to have questions about what those changes will mean for them, and we are keen to ensure that they have access to the answers that they need.

I begin by reinforcing my earlier answer to Miles Briggs about the pattern of evictions in different tenures. For quite a long time, eviction from the private rented sector was extremely dominant as a source of new homelessness. That began to come under control, but it remained high before the pandemic. The emergency regulation that was brought in at the start of the pandemic significantly reduced that. After that time, and before the introduction of the Cost of Living (Tenant Protection) (Scotland) Act 2022, we saw a steady and very marked increase in homelessness from the private rented sector. We did not see that same effect in social housing that is provided by either local authorities or registered social landlords. We recognise that something significant and harmful has happened regarding the sources of homelessness.

We took the view that the economic situation has not markedly changed since the introduction of the legislation. There is a necessity to give a level of protection, not only by pausing evictions to allow people more time to find new accommodation but by having significant measures to create disincentives for unlawful eviction, which remains a serious problem in Scotland. Landlords previously faced a very low level of penalty, which meant that they did not find it to be a disincentive.

We have made it easier and more relevant for tenants who are faced with unlawful or unreasonable eviction to take action to protect themselves from that. We believe that both the moratorium and the additional protections that are provided by the measures against unlawful eviction remain necessary in the current circumstances. The concerns that other members have raised about the availability of rented housing in some parts of the country reinforce the necessity of those measures.

I am not aware of recent contact from the universities on that issue.

What you mean by the rent freeze period is a matter of interpretation. Under the previous legislation, a rent increase notice is the mechanism by which a landlord increases the rent. That action cannot take place inconsistent with the cap from 6 September onwards until or unless the cap is removed or changed.

The legislation has been exactly as successful as I thought it would be. When it was introduced, I welcomed the fact that something was being tried, but I was sceptical whether rent pressure zones would be enough to solve the problem.

There is a lack of data available to local authorities. We know that none of them has taken forward such a zone; the reason is that local authorities do not have the data to justify it, and they could be exposed to the threat of legal challenge if somebody argued that a zone was a disproportionate interference in landlords’ rights. As we develop our longer-term proposals for reforming the rented sector, including a national system of rent controls, we need to fill in the data gaps that exist.

If rent pressure zones had been put into practice and we had seen them work, we might be in a very different position. In my view, the bill that provided for RPZs was unlikely to be successful. RPZs were unlikely to be put into practice and therefore unlikely to reduce anyone’s rent, and that is what has come to pass.

We are now in a situation where, as I have said, some landlords are being very responsible and have tried to protect tenants from rent increases, whether during the cost of living crisis or the years of the pandemic. However—and I am sure that members from across the country are aware of this—others are imposing eye-watering rent increases. I will be far from the only Glasgow MSP who has heard from tenants who are seeing 20, 30 or 40 per cent increases, which are simply unmanageable, unaffordable and unsustainable and will not take place under this legislation.

The rent freeze measures do apply to end-of-tenancy rent increases. The central reason is that we already have that mechanism. Tenants have a right to challenge unreasonable rent increases during their tenancy and there is a requirement for increases to happen only once a year in the private rented sector and with three months’ notice. It is clear that we have the ability to intervene in a short period of time in response to the current emergency.

There is, of course, a longer-term argument, much of which was explored in the consultation on the new deal for tenants. The Government will address those questions in its longer-term legislative work on the private rented sector.