Propertymark lobbying
Timothy Douglas, Head of Policy and Campaigns continues to engage with the Scottish Government, and attended a roundtable meeting with Patrick Harvie, Minister for Tenants’ Rights, on 25 August to discuss the Strategy and rent controls.
Alongside our consultation response, we continue to represent members and the sector to support the recommendations whilst highlighting the potential pitfalls and unintended consequences of some of the proposals.
Draft Rented Sector Strategy Consultation
Propertymark conducted a series of roundtable discussions that sought input and evidence to inform our response to the consultation, which proposes fundamental and far-reaching changes to the private rented sector (PRS) in Scotland.
Analysis of respondents
In total 8,346 responses were submitted. Organisations accounted for 172 responses, with 756 responses from individual members of the public. In addition, 7,508 respondents made a campaign-type submission.
Amongst the organisations, the ‘Private landlord, letting agent or their representative bodies’ respondents were the largest group, followed by ‘Local authorities and their representative bodies’. Propertymark’s response, whilst just one, represents over 350 letting agents and even more landlords, which the Scottish Government should take into consideration.
Possessions process
A commonly raised issue was around the balance between mandatory and discretionary grounds. It was noted that all grounds for evictions became discretionary during the COVID-19 pandemic and have since been outlined they will remain.
All grounds for possession to remain discretionary as Scotland's Covid bill passed
Covid recovery legislation has passed its final stage and will come into force in Scotland from 1 October 2022, meaning increased protection for private rented tenants facing eviction
An alternative perspective was that the mandatory status of some grounds should be reinstated, including to avoid risking lender, institutional, and private investor confidence.
General comments about pre-action requirements included that a tenure-neutral approach would seem sensible. It was also suggested that tenants should be supported to maintain tenancies wherever possible and that this should be the vision guiding all measures considered.
Joint tenancies
94 per cent of respondents agreed with amending the Private Housing (Tenancies) (Scotland) Act 2016 (the 2016 Act) to ensure that all joint tenants can terminate their interest in a private residential tenancy without the agreement of other joint tenants (s).
30 of the 55 private landlords, letting agents or their representative bodies who responded disagreed. Whilst Propertymark agrees protection is needed for victims of domestic abuse in joint tenancies, we suggest that a new procedure is created at the First-Tier Tribunal (FTT) entitled ‘Joint Tenant to be Released’ under which the FTT would have the discretion to end a joint tenant’s interest in a PRT, considering the financial affordability of remaining tenants to sustain the tenancy.
Renting with pets
Those who supported a right to keep pets generally suggested it should be a statutory right, and there was a suggestion that it should be written into the Model Tenancy Agreement.
However, if ‘consent being the default position’ were to be the preferred option, there was a call for it to be supported by appropriate guidance for landlords on how to put the changes into practice. There were also suggestions relating to the types of incentives or assurances that could be offered to landlords to encourage them to rent to people with pets. These included increasing the maximum deposit that landlords are permitted to take and/or requiring tenants to take out pet damage insurance.
Winter evictions
A substantial majority – 90 per cent – thought that additional protections against the ending of tenancies during the winter period are needed. However, the most frequent suggestion was that no eviction order should be enforceable during that time.
Identified risks associated with their introduction and highlighted possible unintended consequences were raised. The financial risk to landlords was the most frequent concern, with further comments including that a landlord evicting a tenant for rent arrears already suffers huge financial losses due to the amount of arrears tenants owe at the point of being evicted. It was suggested that investors will be deterred if further obstacles are placed in the way of ending tenancies, particularly in cases of rent arrears.
Rent controls
Numerous respondents were opposed to any form of rent controls, raising concerns that they have the potential to result in unintended consequences that could reduce supply.
There was also a view that, while the proposals are welcome, rent controls alone cannot solve the inadequate supply of affordable homes and that increasing the supply of social housing is the most important change needed.
It was argued that the overall vision for the sector should be reflected in any future rent control system, including detail on how rent controls will balance protection for tenants with the risk of encouraging disinvestment by existing landlords. There was some concern that the vision and principles set out in the consultation paper do not consider the potential impact and risks associated with rent controls for the PRS.
It was highlighted though, the need to ensure policy anticipates potential adverse impacts, incorporates appropriate enforcement, and can respond to local variation in market pressures.
Some of the proposals within the strategy are causing major uncertainty among letting agents and the private landlords they represent, at a time when the sector is already under huge strain and desperately in need of more investment, not less.
The Scottish Government has already pushed ahead with restrictive legislative changes that will make it more difficult for landlords to take possession of their properties, despite warnings from housing professionals.
We urge Ministers carefully consider the impact of any further reform to ensure it does not create additional risk that disincentives more of the 240,000 private landlords who provide much-needed homes for Scottish people to live in.
