Meeting of the Parliament 21 January 2016
I draw members’ attention to my entry in the register of members’ interests.
I welcome the general principles of the bill. I also welcome the ICI Committee’s stage 1 report. It highlights the need for more information and a wider, more robust set of data, which is still to be considered. I thank the committee and the clerks for the report and congratulate them on all their hard work.
Protecting the flexibility of the private rental market and its ability to develop and improve must not interfere with our responsibility to provide all the necessary safeguards and legal protection for tenants and to improve their security of tenure. Before I discuss specific provisions in the bill, I will highlight a key fact that is the driver of varying opinions on many of the bill’s provisions: the need for a sufficient supply of housing, which currently does not exist.
Regardless of what we say on rent controls, having enough suitable accommodation for students or holiday lets, the fact is that we face a housing shortage. The ICI Committee noted that point, and I strongly support the calls for Government updates on increasing housing supply across all tenures.
Although we all want an increase in the number of homes, it is our responsibility to bring our rules and laws up to date in the meantime. The removal of the no-fault ground is a progressive development, but its replacement with 16 other grounds—mandatory, partially discretionary and one fully discretionary—should be examined more closely.
For the benefit of both the tenant and the landlord, Homeless Action Scotland noted:
“The proposal for many of the grounds for repossession to be ‘mandatory’ could result in a ‘tick box’ exercise which does not allow for anomalous cases to be handled in a sensitive and sensible way”.
Therefore, I look forward to seeing what information the Government can provide, as per the committee’s recommendation that further thought should be given to which of the grounds for repossession should be mandatory and which discretionary.
Similarly, on the topic of rent controls in rent pressure zones, I am wary of adopting a measure that in the long term has proven harmful in other cities around the world. Among the most serious unintended consequences of applying rent controls are actual inflation in rent costs, the removal of investment in homes and, of course, the removal of homes from the so-called market. We know that rents in some areas are expensive; for example, the variation in Edinburgh between summer and the other seasons has a free-market effect on short-term rents.
However, restricting the market’s ability to self-regulate could reduce investment in the sector at a time when that might be needed and could, in turn, result in self-regulation in the direction of higher prices. Such a situation could be truly dangerous to manage, with a very limited supply of housing on the one hand and, on the other, an inability among suppliers to set a market price, which could lead to the effects that have been experienced in other places. The more serious situations found in Stockholm, San Francisco and Washington DC provide evidence of rent controls inflating rent costs, because the maximum annual rent rise becomes the standard annual rent rise—and currently, of course, a rise of CPI plus 1 per cent, or indeed CPI plus anything, as has been recommended, is actually an above-inflation rent rise.
The Law Society of Scotland has highlighted the opaqueness of the consultation process, and it believes that only overwhelming evidence should justify the creation of a rent pressure zone. I also welcome Shelter’s view that tenants should be given a reasonable time to pay any accumulated arrears.
In conclusion, I reiterate my support for the bill’s general direction. I want to see tenants in Scotland get extra security of tenure, but we still need to examine many provisions in the bill in more detail.
15:17