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Local Government, Housing and Planning Committee 28 February 2023

28 Feb 2023 · S6 · Local Government, Housing and Planning Committee

Item of business

Subordinate Legislation

Cost of Living (Tenant Protection) (Scotland) Act 2022 (Early Expiry and Suspension of Provisions) Regulations 2023 (SSI 2023/8)

Harvie, Patrick Green Glasgow Watch on SPTV

Again, as we debated during the passage of the Cost of Living (Tenant Protection) (Scotland) Bill, we recognise that the two dominant parts of the rented sector—the social rented sector and the private rented sector—operate differently. In particular, the social rented sector has a long tradition, and requirement, for consultation and engagement with tenants in relation to rent setting. We wanted to respect that necessary and valuable engagement and consultation. We know that rental income does not necessarily provide for profit—social landlords are not profit-making bodies—but it provides for investment in new build, for retrofitting for energy efficiency and net zero, for maintenance and upgrades of properties and for a wide range of services that social landlords provide in the community. The social rented sector plans such investments over a long time. Given that several members echoed concerns from across the sector during the passage of the bill, more people recognised that some short-term protection was necessary but that, if the zero per cent cap continued for an extended period, it would not only reduce rental income in the year of the cap’s operation but have a compound impact on the financial planning of social landlords over a much longer period, and there would be a detrimental impact on tenants because of the reduced investment. Such factors do not apply to the private rented sector in the same way. That sector tends to be profit making and tends to have a lower level of energy efficiency than the social rented sector, because some properties have not been upgraded in the way that will be required in the future under the new-build heat standard and the heat and buildings regulations on retrofitting. In the absence of some of the factors that apply in the social rented sector, we felt that the legislation was appropriate. The difference in approach was also necessary because, in the absence of large organisations representing private landlords—we have a diverse and fragmented private rented sector—there was no opportunity to negotiate a voluntary agreement with private landlords that would have achieved the same effect as the agreement that I am pleased to say that we reached with the social rented sector. The difference in approach is a mixture of a recognition of the different factors and characteristics of the two parts of the rented sector and the differences in opportunity to achieve a voluntary agreement in the nature of how rent is set. All those factors led us to recognise that a different approach had to be taken. However, I emphasise, again, the broad level of parity that we are talking about. As private rented sector rents are significantly higher than social rented sector rents, we believe that there will be, roughly speaking, parity in monetary terms between the rental increase that will be allowable for that most common type of property—two-bedroom properties—in the private rented sector.

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Local Government, Housing and Planning Committee 28 February 2023

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