Local Government, Housing and Planning Committee

Meeting date: Tuesday, March 21, 2023

Official Report 643KB pdf

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Subordinate Legislation

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Cost of Living (Tenant Protection) (Scotland) Act 2022 (Incidental Provision) Regulations 2023 [Draft]

Item 2 is evidence on draft regulations. I welcome Patrick Harvie, Minister for Zero Carbon Buildings, Active Travel and Tenants’ Rights. Mr Harvie is joined by Poppy Prior, who is a lawyer in the Scottish Government, and Yvonne Gavan, who is a team leader at the housing services and rented sector reform unit in the Scottish Government.

I invite the minister to make brief opening remarks.

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.

Thank you for explaining the clarification in the draft regulations. Do members have questions?

I will return to the questions that I raised in the committee’s evidence session on 28 February, which were about the use of data—specifically, private landlord registration data—to measure the impact that the Scottish Government’s policy and legislation are having. What assessment has the minister made of how that data is being used? How is real-life information being gathered about what is happening with the policy, given that landlord registration lasts for three years? If landlords are choosing not to let their properties, we would not necessarily know that their properties are no longer on the rental market. What wider assessment is the Government planning to do on the impact of the policy?

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.

Is the Scottish Government looking at information to assess what impact the emergency legislation has had and at what rate people could potentially leave the private rental sector? If so, when is that likely to be published?

If we look at different schemes across the world, we see that there has been a cut-off point or cliff edge where landlords have left the market. The legislation prevents rent increases, but it does not necessarily prevent people from deciding that, when they can, they will withdraw private rented properties from the market. I am not clear whether the Scottish Government has any role in preventing that from happening and whether the data is actively being looked at and provided to different local authorities, which could end up facing the consequences of more people declaring themselves as homeless.

The Scottish Government has a responsibility to ensure that temporary emergency measures are necessary and proportionate and that they are appropriate and fit with our housing objectives, and we have a responsibility to take that approach to our new housing bill so that it is consistent with what we seek to achieve in housing.

As a starting point, we recognise that the right to adequate housing is a human right. That has not been delivered by everyone, and we have a situation in which the level of regulation on a number of standards is significantly different between the private and social rented sectors. We are seeking to reduce the gap in outcomes between those types of tenures. Our experience is that, in the long term, increasing the quality of the regulation of the private rented sector is compatible with growth and viability in that sector.

Although I have noticed that some people have sought to blame the emergency measures for decisions that have been made on the new supply of rented accommodation, the measures have no impact on initial rent setting; they impact only in-tenancy annual rent increases. I recognise that some people will argue against any form of protection for tenants or regulation in the market. I do not think that that extreme position would be appropriate, but we will seek to continue to ensure that the measures that we take strike the appropriate balance between providing safeguards for landlords, which are included in the emergency 2022 act, and continuing to expand protection for tenants.

Maybe I will ask the question in a more straightforward way. Are your officials looking at that data, in order to publish it, so that we are acutely aware of the impact of these policies coming to an end?

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.

Thanks for that.

I thank the minister for the evidence today and for going into a bit of detail that was beyond the scope of what the committee is looking at.

We turn to agenda item 3, which is consideration of the motion on the instrument. I invite the minister to move motion S6M-07858.

Motion moved,

That the Local Government, Housing and Planning Committee recommends that the Cost of Living (Tenant Protection) (Scotland) Act 2022 (Incidental Provision) Regulations 2023 [draft] be approved.—[Patrick Harvie]

Motion agreed to.

The committee will publish a report setting out its recommendation on the instrument in the coming days.

I now suspend the meeting to allow us to set up for the round-table discussion.

10:11 Meeting suspended.  

10:27 On resuming—