Chamber and committees

Local Authorities are a key partner in delivering the ambitious aspirations set out in the Scottish Biodiversity Strategy. However, at the present time, they have a limited role in biodiversity monitoring. Some Local Authorities do host Local Records Centres, who gather biodiversity data from volunteer groups and individuals and make it available to a range of users. The Scottish Government and NatureScot are currently funding the Better Biodiversity Project, which aims to encourage community involvement in biodiversity data collection and put Local Records Centres on a more sustainable footing for the longer term. This in turn supports Local Authorities in meeting their Biodiversity Duty.

As per previous Climate Change plans, it must contain policies and proposals, by sector, for meeting the economy wide annual emissions reduction targets for each year. The Plan will also set out for the first time the costs and benefits (including financial cost, emissions and jobs) of the policies it contains, as well as setting out how it will affect different sectors of the Scottish economy and different regions in Scotland.

The Single Building assessment process has started for the 27 buildings in the original pilot. The pilot has been extended to 105 building. As the programme continues we expect further buildings to be identified and assessed. As we survey and undertake these further assessments we will have clearer information on the time-frame for the completion of all surveys on buildings with potentially unsafe cladding.

To respond to the emergency situation caused by the impact of the cost crisis on those living in the rented sector, the Cost of Living (Tenant Protection) (Scotland) Act 2022 introduced a temporary, variable rent cap, initially set at 0% and in place until 31 March 2023.

Our recently published first report to Parliament on the emergency Cost of Living Act, and Statement of Reasons , provided updated economic evidence demonstrating the continued pressure being placed on private rented households due to the ongoing cost crisis. In light of this, the Scottish Government have brought forward regulations to extend the rent cap for the private rented sector for a further six months, along with the moratorium on enforcing evictions – which will continue to apply across all sectors.

While the focus of the emergency measures continues to be on protecting tenants, the Scottish Government recognises that the ongoing impacts of the cost crisis may also be being experienced by some private landlords. Mortgage interest rates, which had been on an upward trend since the end of 2021, experienced a further sharp increase after the UK Government Growth Plan / Mini-budget on 23 September 2022. The average advertised five-year fixed rate rose from 4.75% on 23 September to 6.51% on 20 October, before falling to 5.95% on 22 November.

The Scottish Government is of the view that it would therefore be proportionate to raise the rent cap in the private rented sector to allow within-tenancy rent increases of up to 3% from 1 April.

The voluntary approach to rent setting taken by landlords in the social sector is intended to equate to an approximate average rental increase of less than £5 a week (or less than £22 per month) across the country. As rents in the private rented sector are generally significantly higher than those in the social rented sector, allowing a maximum rent increase of 3% for rents in the private rented sector equates to a similar average rent increase for tenants in two-bedroom properties (the most common property size in the private rented sector). There will be variation around these averages, with higher increases for three-bedroom and four-bedroom properties and lower increases for one-bedroom properties. The Scottish Government considers that this will give a measure of parity to landlords in the private and social sectors in monetary terms, while continuing to protect tenants from unaffordable rent increases during the cost crisis.

While there may be some households where even the modest rent increase allowed under the 3% cap causes an increase in financial hardship, we consider that the amended rent cap will ensure that rent increases are proportionate and therefore continue to protect households against high rent increases while the cost crisis is ongoing. The increase to the rent cap will mitigate against a disproportionate impact on private landlords who may also be experiencing increased costs due to the cost crisis, allowing them to maintain their properties and meet other expenses. We are also proposing that private landlords could, alternatively, opt to apply to Rent Service Scotland for a rent increase of up to 6% if they have had an increase in their defined, prescribed property costs within a specific period.

The Cost of Living (Tenant Protection) (Scotland) Act 2022 is a response to the impact of the cost crisis on those living in the rented sector. The Scottish Government has made clear provisions in the Act must be expired or suspended if they are no longer considered necessary and proportionate in connection with the cost of living.

As set out in our first report to Parliament on the operation of the Act, the social sector rent cap expiry follows the development of an agreed approach on rent setting for 2023-24, taken forward on a voluntary basis, with social housing landlords. Social housing landlords are “not for profit” organisations and all rental income is used to support the delivery of housing and associated services for tenants. Under the Scottish Government’s Social Housing Charter, social landlords are required to set rents and service charges in consultation with their tenants so that a balance is struck between the level of services provided, the cost of the services and how far current and prospective tenants and service users can afford them.

The private rented sector has a high quantity and range of landlords, as well as a very different statutory regime governing its rent increase process. It was therefore not feasible to replicate the Task Group that formed in respect of the social rented sector, where all landlords could be effectively represented by membership bodies.

Whereas social sector rent setting practice involves rents being set annually and in consultation with tenants, with further rent increases typically not taking place either inter- or intra-tenancy, the latest data shows high levels of recent private sector rental growth.

The Scottish Government Private Rent Statistics (primarily based on advertised rents) show a 6.2% annual increase in average 2 bedroom monthly rents across Scotland in the year to end September 2022, while data from letting agents (which relates to new let rents only) show high growth: Rightmove reporting an annual increase of 13.0% and Citylets an increase of 8.3% in Q3 2022 in Scotland, and Zoopla reporting an increase of 11.4% for Scotland in October 2022.

In light of the updated economic analysis recently undertaken – and as set out in the recently published Statement of Reasons – the Scottish Government is of the view that it would be proportionate to raise the rent cap in the private rented sector to allow within-tenancy rent increases of up to 3%.

The voluntary approach to rent setting taken by landlords in the social sector is intended to equate to an approximate average rental increase of less than £5 a week (or less than £22 per month) across the country. As rents in the private rented sector are generally significantly higher than those in the social rented sector, allowing a maximum rent increase of 3% for rents in the private rented sector equates to a similar average rent increase for tenants in two-bedroom properties (the most common property size in the private rented sector). There will be variation around these averages, with higher increases for three-bedroom and four-bedroom properties and lower increases for one-bedroom properties.

The Scottish Government considers that this will give a measure of parity to landlords in the private and social sectors in monetary terms, while continuing to protect tenants from unaffordable rent increases during the cost crisis. The increase to the rent cap will mitigate against a disproportionate impact on private landlords who may also be experiencing increased costs due to the cost crisis, allowing them to maintain their properties and meet other expenses. We are also proposing that private landlords could, alternatively, opt to apply to Rent Service Scotland for a rent increase of up to 6% if they have had an increase in their defined, prescribed property costs within a specific period.

Scotland leads the way in the delivery of affordable housing across the UK, and we have committed to delivering 110,000 affordable homes by 2032, of which at least 70% will be available for social rent. Enabling continued investment in the delivery of high-quality social housing is therefore crucial. Social sector representatives have set out that the current cost crisis poses an enormous threat to this progress, with inflation rates having a far greater impact on the poorest 10% of the population, and living standards and real incomes expected to fall across the UK. The volatility of the economic environment also has significant consequences for housing associations, and the services they provide to tenants.

The Scottish Government has therefore been clear from the introduction of the Cost of Living (Tenant Protection) (Scotland) Act 2022 that we want to work with the social rented sector to seek an agreed way forward as an alternative to the continuation of the Act’s rent cap beyond March 2023.

The outcome of discussions led by COSLA, in respect of local authorities, and the Scottish Federation of Housing Associations (SFHA) and Glasgow and West of Scotland Forum of Housing Associations for Registered Social Landlords, has reached an agreed position with their members that would see increases of 6.4% and 6.1% respectively, as an average across Scotland.

The agreement of an average figure, rather than a fixed cap, is only possible due to the nature of the social rented sector and the opportunity to reach agreement with sector representative bodies. This approach has the advantage of allowing a degree of flexibility to recognise social landlords' priorities for investment such as new supply, refurbishment and services to tenants. We anticipate that the majority of rents will be increased at a level below the agreed 6.4% (for local authority landlords) and 6.1% (for registered social landlords) but there may be some social sector landlords who will, for specific reasons, go beyond these levels. This approach recognises that in some cases tenant feedback to the statutory rent consultations may be in favour of an increase higher than the overall averages agreed, for example to allow planned improvements or maintenance to proceed.

The Scottish Housing Regulator is monitoring and collating social sector rental data presently, and will report in due course.