Housing (Scotland) Bill update
The Housing (Scotland) Bill, which was first published in March 2024, is due to complete stage two of the parliamentary process next week. The Bill contains a number of provisions which would make changes to the Private Rented Sector (PRS) including long-term rent controls which would apply within Rent Control Areas (RCAs) designated by the government, greater rights for tenants to personalise their home, obtain permission for a pet and end a joint tenancy where there is disagreement between the tenants about ending the lease. It also makes provision for the government to introduce further legislation in the future to convert older Assured and Short-Assured tenancies in to Private Residential Tenancies.
For those unfamiliar with how a Bill progresses through Parliament, there are three stages of scrutiny:
Stage 1 – an assessment of whether Parliament supports the general principles of the Bill. This is carried out by the parliamentary committee designated to lead on the Bill which in the case of the Housing (Scotland) Bill is the Local Government, Housing and Planning (LGHP) Committee. The committee examines the Bill through evidence sessions involving contributions from individuals and organisations, known as ‘witnesses’, with knowledge of the subject matter. SAL submitted written evidence to the committee and SAL’s chief executive John Blackwood shared members’ views on the Bill at two oral evidence sessions.
There is then a debate and vote involving the whole Parliament, but again this is about the general principles rather than the detail of the Bill. 83 MPSs voted for the Bill, 31 against, 4 abstained and 11 did not vote.
Stage 2 – during stage 2 MSPs from all political parties have the opportunity to propose amendments/additions to the Bill over a period of several weeks. There is then a thorough scrutiny of the amendments proposed by MSPs by the committee leading on the Bill. In the case of the Housing (Scotland) Bill, Parliament decided that this task should be split between two different committees, with the Local Government, Housing and Planning Committee dealing with the provisions which affect the Private Rented Sector (PRS) and the Social Justice and Social Security Committee focussing on the provisions which affect social housing. After discussing each amendment the committee votes on whether they should be added into the Bill or not. There are seven MSPs on the LGHP Committee (three SNPs, two Scottish Conservatives, one Scottish Labour and one Scottish Greens) who cast their vote and any measures which receive four or more votes are added to the Bill.
It is interesting to note that nearly 600 amendments have been proposed to the Housing (Scotland) Bill during stage two, which according to government officials is the second highest number of amendments proposed for any piece of legislation ever laid before the Scottish Parliament – an illustration of how complex, divisive and controversial some of the measures in the Bill are. If we take rent control as an example, the Scottish Conservatives lodged amendments removing the rent control provisions entirely while at the other end of the spectrum the Scottish Greens lodged amendments to restrict increases in line with wage growth and prevent landlords with properties outside of RCAs from increasing their rent between tenancies if they had already increased it within the previous 12 months. While none of these amendments were approved by the committee, an important government amendment to allow rents in RCAs to rise in line with inflation + 1% (up to a maximum of 6%) was agreed to. This amendment was called for by SAL and other stakeholder groups to provide certainty to landlords and investors that rents would not be frozen or fall in real terms. The amendment was agreed to on the back of SAL’s lobbying work and the Housing Minister stating at SAL’s Scottish Letting Day conference that landlords have the right to make a “return” on their investment.
In total the amendments have been debated over nine days of committee meetings involving over 23 hours of discussion. Apart from amendments to add purpose built student accommodate (PBSA) tenancies into local authorities’ assessments of rent conditions (which the government will likely seek to reverse at stage three), most of the amendments agreed to have been relatively uncontroversial. However, there were heated debates on many topics including regulating PBSA tenancies, tackling poor quality housing, whether landlords should be permitted to require UK based guarantors for overseas tenants and how much landlords should be fined for raising rents by more than the cap or failing to provide rent/property data (the committee voted to stick to the £1,000 fines in the Bill despite the Scottish Greens calling for these to be raised tenfold to £10,000).
Stage 3 – the Bill will soon progress to stage 3 during which MSPs can again propose amendments to the Bill. At stage three the amendments are discussed and voted on by the whole Parliament instead of the seven-person committee. This is the final opportunity for Parliament to make changes to the Bill. SAL is expecting stage three to commence after the summer recess and potentially complete before the end of this year.
If the Bill passes stage three then it is submitted for Royal Assent, where the King officially agrees to the Bill becoming a legally binding Act. While it is possible for some measures in a Bill to come into force as soon as it receives Royal Assent, in the case of the Housing (Scotland) Bill the provisions affecting the Private Rented Sector (PRS) require secondary legislation to be drafted and approved to set out the finer details of how the provisions will operate. For example, we need regulations on exactly how RCAs will operate and importantly which properties will be exempt and in which circumstances an above-cap rent increase will be allowed within a RCA. We also need further regulations to detail under what circumstances it is reasonable for a landlord to refuse permission for tenants to have a pet or personalise a property, what conditions can reasonably be attached to any consent given and what types of changes a tenant can make by way of personalisation. Websites, forms and guidance need to be produced for rent/property data collection by local authorities, ending joint tenancies and requesting/giving permission for pets/personalisation. This means that it is still likely to be another year or two (and possibly longer for some provisions) before they come into force.
The government is currently conducting a public consultation on how powers within the Housing (Scotland) Bill could be used to exempt certain types of properties from rent control, circumstances where rents could be increased above the level of the rent cap and clarify how joint tenancies in the private sector are ended. Responses to the consultation will help to shape the secondary legislation required to bring these measures into force after the Bill has been enacted. The consultation can be read and responded to here. The deadline for responding is Friday 18 July.
Having secured an amendment to ensure that rent increases in RCAs can keep pace with inflation, SAL is now focusing on ensuring that landlords who have kept their rent below market value can reset the rent to market value between tenancies in RCAs. SAL has been successful in having this proposal included in the consultation and it’s important that members respond to the consultation and give it their support.
SAL will be hosting a webinar with the Scottish Government on 3 June at 11.30am during which members will have the opportunity of learning more about the matters being considered in the consultation paper. To find out more and book your place click here.
SAL will keep members updated with the progress of the Bill.
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