Meeting of the Parliament 17 March 2016
I have reached an interesting point in the passage of the bill. I said at stage 1 that it was not possible for me to support the bill then but that I could envisage supporting it later. Sadly, it seems that the bill as introduced was as good as it got.
On day 1 of the period for lodging amendments for stage 2, 150 Government amendments landed on the doorstep. The effect was that stakeholders were trying to get me to lodge amendments to parts of the bill that the Government had already lodged amendments to remove completely. There was a process of radical change, which was ironic, given that at the start of the process the Government was determined to consult as widely as possible. I was disappointed because, when I spoke to stakeholders during the consultation stage, I told them to engage vigorously and actively with the Government to ensure that the bill reflected their needs.
As we have gone through the process, disappointment has built among a number of stakeholders. They have been disappointed by simple things such as a misunderstanding about what the private rented sector is. Certain quarters assume that it is all big business and big money—people with money to spend. However, many of Scotland’s private landlords rent out only one property or a handful of properties. Many of them are reluctant landlords who find themselves with little alternative than to permanently or temporarily rent out a property.
The bill could have done much to ensure a fair balance between landlords and tenants but, eventually, the Parliament did what it always does: it took the side of tenants. That was not necessary. We could have done everything that we have done for tenants with the bill and done something for landlords as well. Perhaps we would have done that if we had better understood what the private rented sector is.
The threats to the sector from the bill include things such as rent control. We discussed rent pressure zones during the amendment stage. I believe that, once a rent pressure zone is declared, it will create a vacuum for investment, because nobody will invest if they cannot get the return that they expect to get. The notion of rent control is potentially counterproductive, because the way that the bill sets out for increasing rents may ultimately become an agenda for rent increases, rather than a way to control them.
I have a concern, which I expressed earlier, about the loss of the initial period. The initial period had the potential to benefit both landlord and tenant if properly implemented. Its disappearance at stage 2 was one more confusing element for the stakeholders who tried to engage in the process.
I have already praised the Government, but I do so again, for its decision to act on purpose-built student accommodation. However, it turned out at stage 3 that that was a reluctant action, and the Government has perhaps stepped back from the opportunity to encourage such development.
We should have done more to create a proper balance between landlord and tenant. We could have done more to understand the differing circumstances that exist in different parts of the country and in city and rural environments. We could have done more to ensure that those who wish to invest in private tenancies can do so with confidence that they can have a tenant who will deliver for them. We could have done more to build the understanding—which some people who spoke in the debate clearly have—that a rented property with a quality tenant is a package that is more valuable than the sum of its parts.
We could also have done more to encourage new types of investment. In recent years, many of us have speculated that there are investors who are willing to become involved in building property, perhaps even on a large scale, to rent privately in the Scottish marketplace. However, having spoken to stakeholders who have watched the progress of the bill, I know that opinions have changed and opinions have been formed. I heard a simple opinion from someone who expressed his views to me on one occasion. He said that, having looked at the changed environment north of the border, he would make the simple decision to carry out his investment south of the border.
That is about confidence, about difficulty with understanding circumstances and about time. If there is a lack of confidence in the legislation among landlords, confidence can be recovered only over a period of time. I worry that investment will be lost and that we have missed a chance to bring more investment in.