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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 13 May 2025
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Displaying 1235 contributions

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Local Government, Housing and Planning Committee

Housing (Scotland) Bill: Stage 1

Meeting date: 10 September 2024

Paul McLennan

The answer to the question of whether we will withdraw the bill is no, for a number of reasons.

I will go into more of the detail.

We need clarity for tenants about what the rent increases will look like. Ms Gosal mentioned investment opportunities, and investors also need clarity.

In terms of where we are now, it is a framework bill to give flexibility, including in relation to what is required in local areas. What the rent control formula will be is also an important part of it.

Another key thing is discussions with stakeholders. I appreciate Mr Griffin’s point about the committee, and I am happy to come back to the committee when the amendments are lodged. Discussions with stakeholders in order to get the balance right is an important part of the rent controls, if they are proposed.

Coming back to the point about areas, if a local authority proposes and would like to go down the route of rent controls, it has to go out to consultation and consult the people who live in the area, which is incredibly important. The principle of rent controls is there, but the rent control measures that are proposed in Edinburgh will be different from those in Glasgow and in other parts of Scotland. Consultation is built into the bill. If a rent control is to be introduced, it is all about trying to strike the right balance.

I take the point that Mark Griffin made about the committee, but we need to move on in relation to giving that clarity to tenants and investors and trying to strike that balance. It is also about giving that certainty in relation to keeping people in the private rented sector.

When we talk about investors, we might be talking about landlords who have one, two, three, four or five properties. It is important that we recognise that the PRS is an important part of it, but so are the investment sector, the MMR sector and tenants.

I appreciate the point that Mark Griffin made. I am happy to come back to the committee when the amendments are lodged so that I can be held to account; that is what I am here for.

It is about giving us that flexibility. It is all about trying to get that balance and move us on at a time when we need a little more certainty.

Local Government, Housing and Planning Committee

Housing (Scotland) Bill: Stage 1

Meeting date: 10 September 2024

Paul McLennan

It is key that the regulations need to be reviewed on a regular basis and that they do not need to be in place longer than is required. The bill is trying to give that flexibility. It is not saying that the period is definitely five years—it gives that flexibility.

There might be circumstances—for example, in a freeport—that impact on the housing market. I visited Shetland and Orkney and talked to people about the impact of renewables development. It is great to have economic development, but if there is an influx of construction workers or longer-term workers for a period of time, it distorts the market to a certain point. We need to try to tackle that when we are talking about the need for temporary accommodation. We are having discussions with local authorities about that issue; we are having a round-table meeting on it. However, if we or the local authorities do not get that right, there will be an impact on rent. It is down to supply and demand. If 2,000 or 3,000 construction workers move into an area and there is a lack of accommodation, that will impact on the rental market. There is a broader strategic discussion that we need to have, but rent controls should not be in place any longer than they need to be and they should be reviewed on a regular basis.

As Yvette Sheppard said, we are speaking to rural local authorities about that now and trying to look at any issues that might come up further down the line.

Local Government, Housing and Planning Committee

Housing (Scotland) Bill: Stage 1

Meeting date: 10 September 2024

Paul McLennan

No—I am just suggesting that as an example, but I am speaking more broadly. I am talking about how a market might be distorted for a period of time, so we would need to make sure that we are developing housing as the workers come in over that period of time. I am saying that, if we do not get that balance, that might distort the housing market, although I am not suggesting that that would be the case or that local authorities would need to go down that route. However, we need to be aware of local circumstances and how the market might change.

We talked to Orkney Islands Council and Shetland Islands Council, which had seen rents go up by large amounts because there was not enough accommodation. Strategically, we need to get ahead of that to make sure that there is enough temporary accommodation and we need to work with local authorities. As I said, the freeport in Highland will have an estimated 25,000 jobs, so we need to be developing housing to make sure that it is meeting the demand, because it is about supply and demand. We are in discussions with Highland Council and other local authorities and house builders. You will know that we had a meeting last year where we got house builders around the table with the freeport developers and said, “Okay, how do we develop this?” That is an example of how a market might be distorted. I am not saying that there would need to be rent controls or anything like that. That decision would depend on local circumstances and would have to be backed up by data.

Local Government, Housing and Planning Committee

Housing (Scotland) Bill: Stage 1

Meeting date: 10 September 2024

Paul McLennan

That issue has been raised. I know that you have an interest in housing in rural areas, which is incredibly important. That is part of the discussions that we are having with local authorities. It is not just the City of Edinburgh Council and Glasgow City Council; we are having discussions with Highland Council and other local authorities. When I go to any local authority, I speak about the PRS. The bill is always raised in relation to that.

It comes back to local circumstances. The issue has not been raised hugely in rural communities. It is more about supply and demand in the PRS. I am happy to discuss that, because you are closer to the issues on rural housing and have more regular discussions on that. It is more about what the role of the PRS is, and it is different in rural communities. Sometimes it plays a larger role, so we need to take account of the local circumstances.

I will bring in Yvette Sheppard, who has had discussions with rural authorities about this. It has not been hugely raised, but it is an issue that we need to be aware of. It is about local flexibility.

11:00  

Local Government, Housing and Planning Committee

Housing (Scotland) Bill: Stage 1

Meeting date: 10 September 2024

Paul McLennan

I supported the national outcome on housing before I became minister. It was discussed by various groups, and its importance for housing has been recognised, with discussions about what the outcomes will actually look like. Indeed, it is still under discussion at the moment. I am happy to write back to the committee about that, as it is important.

Data will be an important aspect of rent controls and of determining what comes through on a local basis, as well as nationally. That goes back to the point about the nuanced approach. What levels of investment are coming through for mid-market rent, build to rent and other forms of investment in the housing sector? I think that that is measurable.

Like for any bill, we need to evaluate how effective the measures have been—through rent controls and rent increases, and through the levels of investment being made. We will write back to the committee with more details about the national outcome.

Local Government, Housing and Planning Committee

Housing (Scotland) Bill: Stage 1

Meeting date: 10 September 2024

Paul McLennan

I have engaged extensively with stakeholders since the bill was published, as I did before then. When I took over responsibility for the bill from Mr Harvie, I reviewed what had been previously proposed. It was key for me to set out a bill that still protected people, where they need protection, from rent increases. That is the main point of the bill, which we indicated in the programme for government last week. The need for investment is also important, whether that is in the mid-market rent sector or the build-to-rent sector. We are engaging with stakeholders extensively on that and will continue to do so. There is no doubt that we need investment in order to build homes.

As we know, Government funding, whether it is in the United Kingdom or Scotland, is extremely tight at the moment and institutional investment will not replace the need for it. Although I hope that Government funding will expand and grow, we need investment in the sector, whether that is in the mid-market rent or the build-to-rent sectors. In the programme for government, we talked about the commitment to growing investment fund MMR stock.

About nine months ago, I also set up a housing investment task force, which brought together investors, banks, local authorities and the likes of the Scottish National Investment Bank and the Scottish Futures Trust, to look at how we can get more money into the sector. Rent controls have been part of those discussions. There are also other ways in which we can try to get money into the sector, and I am committed to making sure that we get investment into housing.

I take on board what investors have said, but I hope that what we achieve through the bill will allow investment to come into Scotland. There has already been investment, but we need more. Lots of developments need an all-tenure approach. Sometimes that will be done through local government and funding will be provided by local authorities and registered social landlords, but we also need institutional investment for that. In the bill and through what we are proposing with rent controls, I hope that we can strike that balance.

Local Government, Housing and Planning Committee

Housing (Scotland) Bill: Stage 1

Meeting date: 10 September 2024

Paul McLennan

I think that that problem is much broader than the private rented sector. The Construction Industry Training Board published a study six to nine months ago that broke Scotland down into 10 areas and identified the resources in those areas, including the workforce, operating companies and colleges. I continue to meet Graeme Dey to discuss how we fund colleges and construction courses. I have had further discussions with the CIH about how we professionalise the construction sector and ensure that those in it are as qualified as possible, and I asked the trade body to produce a paper on that, which we have recently received. We are working with the body on how we expand qualifications and are looking at what else needs to be done in the sector to ensure that it has enough qualified people and that it attracts them because, traditionally, the housing sector has not done that, but there are great opportunities for people.

As we know, there have been issues because of Brexit, which has reduced the size of the workforce. We need to ensure that we try to get people into the construction sector. The issue of visas for the sector has been raised with the UK Government. It is not just affecting housing. If we look at the growth in renewables, for example, having spoken to colleagues in that sector, I know that there is a real demand for construction work for that. We are looking at a number of solutions to try to ensure that the sector is up to the level that it needs to be at with recruitment and for future training. I think that the average age for people who are working in the construction sector is 60, or near enough. We cannot go on like that; if we look at the demographics, we see that we will run out of people. It is a challenge, but we are approaching it in different ways.

Local Government, Housing and Planning Committee

Housing (Scotland) Bill: Stage 1

Meeting date: 10 September 2024

Paul McLennan

I think that we are looking at the first quarter of next year—that is the task force’s target. I am happy to write to the committee on that point. However, the minutes are online, so they can be looked at.

Local Government, Housing and Planning Committee

Housing (Scotland) Bill: Stage 1

Meeting date: 10 September 2024

Paul McLennan

Correct me if I am wrong, but I understand that your report is due out at the end of October.

Local Government, Housing and Planning Committee

Housing (Scotland) Bill: Stage 1

Meeting date: 10 September 2024

Paul McLennan

I would think that it would be around that time, or not too far off. Again, I am happy to come back to the committee when the amendments are lodged to have that discussion and take that further.