Hansard

I am delighted to be able to speak on the Infrastructure and Capital Investment Committee’s stage 1 report on the Private Housing (Tenancies) (Scotland) Bill.

The vast majority of the evidence that the committee received was in favour of the reform of the current tenancy regime. The Housing (Scotland) Act 1988 brought about the present system—I am sure that I am not alone in the chamber in thinking that 1988 seems like only yesterday; it is amazing how time flies when we are enjoying ourselves—but it was abundantly clear that it does not now reflect the requirements of a modern private rented sector. Although there was broad agreement on the need for reform, there was a range of views on what the nature of that reform should be. I will use my time to highlight some of the issues and the committee’s response.

At the forefront of the committee’s scrutiny was a focus on the Scottish Government’s core aim in the bill, which was to rebalance the relationship between landlord and tenant. That included the balance between the right of a landlord to regain possession of their property versus the right of a tenant to feel secure in their own home; the balance between the right of a landlord to recover rent arrears versus the right of a tenant to take their case to an independent tribunal; and the balance between ensuring continued investment in the private rented sector versus the right of tenants to challenge an unreasonable rent increase. Although the committee supports the general principles of the bill, in our report we make a number of suggestions to help to ensure that it strikes the right balance and that the proposals in it are proportionate.

A key area is, of course, the removal of the no-fault ground, which currently gives a landlord the right to end a tenancy once the initial rental period has ended. The new system will remove that arbitrary ground so that landlords will have to provide a reason for ending the tenancy using one of the 16 grounds that are listed in the bill. The committee recognises the concerns of landlords and their representatives, but six of our seven members agree with the removal of the no-fault ground.

Twelve of the 16 grounds are classed as mandatory, but for the other four grounds, the first-tier tribunal will have some discretion on whether the tenant should leave the property or whether a different action should be taken. In some cases, the mandatory grounds could require people to leave their home due to the fault of the landlord, such as the revoking of the house in multiple occupation licence, rather than because of anything that a tenant may have done to put their tenancy at risk. The majority of the committee therefore calls on the Scottish Government to give further consideration to the balance of mandatory and discretionary grounds or the degree of flexibility that is available to the tribunal.

Of all the issues that were considered, perhaps that of student and holiday lets generated most interest. In part, that was due to the significant role that students and tourists undoubtedly play in the private rented sector.

I learned a new acronym in our work: PBSA, which stands for purpose-built student accommodation. Its proponents were concerned that, by giving students the same security of tenure as all other tenants—a not entirely unreasonable proposition—the PBSA business model might be significantly weakened.

We listened carefully to those concerns as well as to the concerns of the landlords of more traditional student lets, who were worried about the perceived loss of flexibility in renting properties to students from autumn through spring, with holiday lets in the summer. Although we appreciated the intention behind having the same security of tenure for all those in the private rented sector, we nevertheless suggest that the Government look again at those specific issues. I note the minister’s assurances that the Government will look again at them, although she indicated quite clearly its wish to maintain its commitment to an open-ended tenancy.

Under the bill, the first-tier tribunal will have responsibility for ensuring that tenants are provided with a tenancy agreement and specified information. The tenant will also have recourse to the tribunal when they believe that their tenancy has been wrongfully terminated by a landlord who has used one of the 16 grounds for eviction referred to earlier under false circumstances. I note that the minister wrote to the committee, through me, earlier this week to outline that the tribunal is expected to start hearing cases from December 2017.

The committee agrees that measures should be in place to ensure that landlords evidence an eviction through proper procedure. It also agrees that providing an opportunity to challenge wrongful evictions will assist security of tenure. Some members thought that the three-month penalty payment associated with wrongful termination might not be sufficient to deter wrongdoing by a landlord, so we call on the Government to consider whether that reflects the financial impacts elsewhere, such as the costs to local authorities for homeless applications and the need for tenants to pay a deposit elsewhere, as well as the emotional distress caused to the tenant.

We also seek clarity from the Government on what support and legal assistance would be in place for those taking their case to the tribunal, whether third parties would be able to take cases to the tribunal on behalf of tenants, and whether the tribunal would be able to adjourn cases. Our recommendation on third parties asks whether that would be possible with the full involvement of the tenant.

We welcome the proposals to apply restrictions in relation to rent, including allowing only one rent increase per annum with three months’ notice and the ability to challenge excessive rent hikes through rent service Scotland and the tribunal. In particular, the committee feels that those measures will assist tenants to plan their finances to deal with future rent increases, and prevent rent increases from being used as a lever to evict tenants.

On allowing local authorities to apply to the Government to designate areas as rent pressure zones where rents rise excessively and where the council will be able to apply rent caps, the committee notes that the measure is intended to be a discretionary tool for local authorities to target problem areas. The committee, however, requests clarity on specific aspects, including how the bill will ensure that investors are not dissuaded from investing in rent pressure zones and how it will prevent landlords from inflating rent increases between tenancies.

I thank all those who provided evidence on the bill, whether they were highlighting an issue on behalf of landlords or on behalf of tenants. I put on the record my thanks to my fellow committee members; it was, as ever, a real team effort and a pleasure to work with all my colleagues on the committee.

On behalf of the Infrastructure and Capital Investment Committee, I look forward to the Scottish Government responding in full to all our recommendations and setting out further changes to the bill at stage 2, and I commend the committee’s report to the Parliament.