Chamber and committees

Good morning, convener, and thank you. I am happy to be here today to present the draft Cost of Living (Tenant Protection) (Scotland) Act 2022 (Incidental Provision) Regulations 2023.

As we have discussed with the committee previously, you will be aware that the emergency Cost of Living (Tenant Protection) (Scotland) Act 2022, which was passed last year, had three key aims: first, to protect tenants, stabilising their housing costs by freezing rents; secondly, to reduce the impact of eviction and homelessness, through a moratorium on evictions; and thirdly, to reduce unlawful evictions and avoid tenants being evicted from the rented sector by landlords who want to raise rents between tenancies during the operation of the temporary measures.

Last month, the committee considered and voted for regulations to extend some of those provisions beyond 31 March to the end of September this year. I was pleased that the Parliament also voted to approve the regulations, thereby ensuring that important protections for tenants continue, given the challenging and uncertain economic times.

Although it is crucial that some emergency provisions continue for the time being, the emergency 2022 act is, of course, temporary, and it is equally important that we plan for the time when the protections come to an end.

During the passage of the Cost of Living (Tenant Protection) (Scotland) Bill, we acknowledged that termination of the rent cap might lead to a large number of private landlords seeking to increase their rent all at once, which could cause significant and unmanageable rent increases for tenants. In those circumstances, the existing rent adjudication process will need to be temporarily modified, to provide a suitable adjudication mechanism that is fit for purpose.

For that reason, the emergency 2022 act contains a regulation-making power to temporarily reform the existing rent adjudication process, which was brought in by the Private Housing Tenancies (Scotland) Act 2016. The proposed approach would support our transition out of the emergency measures and help to mitigate unintended consequences that might arise from our bringing the temporary rent cap to an end.

Schedule 3 to the emergency 2022 act provides ministers with the power in that regard. The short affirmative instrument that the committee is considering today makes a minor technical amendment to schedule 3, to put it beyond doubt that the powers that are conferred on the Scottish ministers function as intended. It does that by renaming a title and heading, renumbering a section and correcting a reference. That will ensure clarity if and when the Scottish ministers choose to exercise the powers conferred on them in schedule 3. Instruments that are made under that power will be subject to the affirmative procedure and subject to scrutiny and approval by this committee and the Parliament.

The severity of the costs crisis and the urgent need to respond quickly meant that the 2022 act had to be drafted and delivered at pace, to ensure that tenants could be offered additional protection as quickly as possible. The short technical instrument that the committee is considering today clarifies a small part of the drafting, to ensure that the important rent adjudication provisions will work as they are intended to do when the time is right to bring the emergency provisions to an end.

I thank the committee for its scrutiny of the draft regulations. I am happy to answer any questions that you have.

Although it is not technically relevant to the instrument that we are discussing—which is a clarification of the drafting of the legislation on the introduction of rent adjudication measures, as and when the temporary measures come to an end—when we referred to the landlord registration figures, we made it clear that that is only an administrative source of data. It does not provide the rich granularity of data that all stakeholders recognise is necessary. Longer-term reforms need to be made to ensure that there is data collection in the private rented sector at the level that we need it.

Although we have an admittedly limited source of information through the landlord registration scheme, it shows that there has been no decrease, and perhaps a slight, very marginal, increase in the number of registered properties prior to the emergency measures coming into force. Mr Briggs is right that there would be a time lag between landlords seeking to make decisions about their future in the industry and any deregistrations. We acknowledge that that is the case and we have presented the information that we have available to us.

As I said in response to your first question, everybody—landlord organisations, tenant organisations, housing academics and the Government—recognises that there is significant need for additional data and for depth, detail and granularity of data in the private rented sector. That is a long-term piece of work, and the Government will bring further work for the attention of the committee and Parliament to improve the collection of data in the private rented sector. For the time being, we have noted that the information that we have, limited though it is, from the landlord registration scheme does not show a drop-off in the number of properties that are available.

—and I ask Parliament to approve the necessary and important measures that are before it today.

In summary, for many years, Scotland has led the way on housing issues, including through the abolition of the right to buy, the provision of security of tenure for tenants and the provision of new social housing. Through the Cost of Living (Tenant Protection) (Scotland) Act 2022, it continues to show such leadership. I am proud of that work—

I am afraid that I need to move on.

We recognise the on-going impacts of the cost crisis, which may also be impacting on some private landlords. That is why the regulations propose that the rent cap be varied to allow for within-tenancy rent increases of up to 3 per cent.

As the whole Parliament is well aware, we introduced the Cost of Living (Tenant Protection) (Scotland) Act 2022 to do three things: to protect tenants through stabilising their housing costs by freezing rents; to reduce the impact of eviction and homelessness through introduction of a moratorium on enforcement of evictions; and to avoid evictions from the rented sector by landlords wanting to raise rents between tenancies during the temporary measures, and reduce unlawful evictions.

Since then, the 2022 act has provided important additional protection for tenants across the rented sector, as we continue to live through challenging and uncertain economic times. Our updated data and economic analysis—which we published at the start of this year—shows that the unprecedented economic position has not yet fundamentally changed, and that many households in the private rented sector, in particular, continue to struggle.

It is for that reason that the regulations that are before the Parliament today seek to extend the rent cap measures for the private rented sector, and the eviction moratorium provisions, across all rented sectors that are covered by the 2022 act, and to extend other important provisions in the act for a further six-month period to 30 September.

I will, if I can have some extra time.

As Mark Griffin knows, the necessity and proportionality of the emergency measures needs to be continually reassessed in the light of events. That is why the Cost of Living (Tenant Protection) (Scotland) Bill, which was supported by the Labour Party, was structured as it was. However, we have committed to introducing the new housing bill as soon as possible after the summer recess this year.

In that case, I need to move on quickly.

That approach gives a measure of parity in monetary terms, in line with the voluntary rent-setting agreement that is in place with social sector landlords, while continuing to protect tenants from unaffordable rent increases.

There is also a safeguard in place for landlords who could alternatively opt to apply to rent service Scotland for a rent increase of up to 6 per cent, if they have had an increase in their defined prescribed property costs within a specified period.

I draw to Mr Mountain’s attention that it is important to recognise that, as well as being time limited and kept under review, the emergency legislation does not affect initial rent setting; it affects only in-tenancy rent increases.