Rent Better research: final report published

Over the past five years research consultancy Indigo House has been conducting independent research into the Scottish private rented sector (PRS), commissioned by the charitable Nationwide Foundation

The project, termed “Rent Better”, sought to understand the impact of legislative changes on renter and landlord experience, recognise what has worked and what hasn’t, and be able to identify where further changes are needed to deliver the safe and secure homes that are essential to a healthy and fulfilling life.

When the Nationwide Foundation committed to funding this research in 2019, they couldn’t have anticipated the scale of further changes that would affect the Scottish private rented sector in the subsequent years. Various factors have significantly influenced the market, such as the Covid-19 pandemic and the cost of living crisis, as well as further legislation from Scottish government, most notably in the form of emergency legislation to limit rent increases.

The project has now come to an end with the last of three reports being published.

Findings include:

• While the number of PRS homes has reduced in Scotland since 2017, the number of social rented and privately owned homes has increased over the same period. This has resulted in a reducing proportion of all households living in the PRS in Scotland – from 15% in 2017 to between 13% and 14% in 2022. This evidences the changing balance of supply/demand in the PRS.
• Landlords are in general satisfied with the PRT and ‘settled’ with the consistency in letting practice that it brings. These positive views are however marred by the scale and pace of subsequently introduced Scottish legislation (including the Covid and Cost of Living Acts), with legislation around rent control being the most unpopular amongst landlords. Combined with wider volatile market forces, this has led to significant landlord dissatisfaction in Scotland.
• Landlords are much less confident in the future sustainability of the PRS compared to five years ago, with confidence decreasing from 41% in 2019 to 17% in 2024. A much higher proportion of landlords stated that they planned to leave the sector compared to the same survey taken five years ago.
• Tenants feel more confident in being able to stay in their home compared to five years ago.
• While most tenants are satisfied with their experience of private renting, renters on low incomes and those in housing need are much more likely to be dissatisfied.
• There may be a normalisation of high rents, leading tenants to accept rent levels which leave them in financial hardship.

Recommendations include:

1. Deliver more and better enforcement – there should be much greater emphasis placed on strong and targeted enforcement of existing legislation, especially at the bottom of the market where tenants have less market power to address failings and less choice to move elsewhere
2. Deliver a greater supply of affordable housing – the Scottish Government should increase funding for a new supply of social and Mid-Market Rent and other affordable housing, including increasing resources for the purchase of PRS stock by housing associations to ensure affordable housing is accessible to all.
3. Capacity should be increased in the First Tier Tribunal system, and the system should be simplified to encourage tenants and landlords to seek formal justice when necessary.
4. Confirm the role of the PRS in Scotland – there should be a review of the Scottish Government’s strategy for the PRS. Given the stagnation and the likely reduction in supply in the PRS, the Scottish Government should clarify its position on its role in the overall housing system.
5. Carefully assess rent control – if the Scottish Parliament determines that price control should be introduced in the PRS, this must be very carefully designed to avoid any unintended consequences of increasing rents and reduced supply. A first step in any move to implement rent controls would be establishing a system of ongoing collection of robust rent data.

Thank you to SAL members who contributed to the research. To read more about the research and its findings click here.

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