Chamber and committees

The evidence that the rent adjudication process can operate effectively with the current data is that it operated effectively before the emergency legislation was in place. We are returning to a system that had already been in operation for a number of years. We are adding a comparator that will ensure that we avoid the very steep rent increases that might have taken place in some parts of the country in the absence of that additional comparator. We are essentially restarting a process that has already been embedded.

We will get into the longer-term debate about how to structure a permanent system of rent controls for Scotland once the housing bill has been introduced and the committee scrutinises it. One of the questions that we will need to address is how much additional data needs to be collected in order for a new system—a system that is not yet in place—to operate effectively. That will be an important question for the committee to get into at that point. It is very clearly not the case that we need additional data in order to operate the rent adjudication process, because we had been doing so prior to the emergency legislation.

We will certainly welcome feedback from a range of voices, not only on the awareness-raising work that we are doing in the immediate term but on the operation of the temporary measures once they are in force. We will continue to keep a close eye on these matters.

A landlord has to give a full three months’ notice of a rent increase, and the rent must not have changed when that notice is issued. Tenants who wish to make a challenge can initiate that within the first 21 days of that period.

Rent service Scotland aims to respond to adjudication requests within 40 days. Obviously, there is a degree of independence from Government in the process, but we will continue to monitor the service’s ability to respond to requests in a timely manner. It is required to do so within 12 weeks, but it aims for 40 days. If we are able to maintain that level of service, the understandable concern that Mark Griffin raises is less likely to materialise.

The circumstances will be different between not only parts of the country geographically, but individual tenancies.

For example, we can think about a tenant who left a private rented home, for whatever reason, while the rent cap has been in place under the 2022 act. If there has been a turnover of tenancy, the new tenancy might well have been reset according to open-market rent and be at the upper end of that. In such a circumstance, there might be very little gap between the rent that is currently being paid and the open-market rent. However, there might be a very big gap for the same property with the same landlord, if there had not been a turnover of tenancy and that landlord, prior to the cost of living crisis, had done their best to keep rent rises low for a number of years, because they wanted to hang on to a good tenant and sustain the tenancy. The circumstances will be different.

In relation to the earlier questions about data, it is very clear that we do not have granular, detailed data about the level of rents that are being paid. We have much more information about the rents that are being advertised. That is a matter to keep under careful watch as the rent adjudication process resumes and Scotland moves out of the temporary rent cap measures. However, at the moment, we do not have the level of detail about the rents that are being paid, as opposed to the rents that are being advertised, which would give a definitive answer to the question.

A range of views are expressed on the potential impact of the temporary legislation on the wider PRS market. It is very clear that new rent increases, as advertised, have been rising in a worryingly strong way in many parts of the UK. A few days ago, the BBC ran a story that showed that Glasgow and Edinburgh are at the upper end of that. Glasgow was a fraction of a per cent above Bolton and Manchester; Edinburgh was a bit below Manchester and London.

If the temporary legislation is the factor that is driving the increase in new rents being set, I would expect to see a big gap between areas in Scotland and areas in the rest of the UK, but we do not see that. We do see a range of experiences in different parts of Scotland. Cities, as well as towns that are within commuting distance of cities, have been seeing big increases in advertised rents throughout the UK. That is a worry and we will have to consider it as we look at the permanent changes to legislation with the new housing bill.

I do not think that the situation could be used as a justification for not using the power to add an additional comparator as we return to the rent adjudication process. That additional comparator enables us to provide some protection against a cliff edge for tenants as we move out of the temporary legislation. The evidence from around the UK of rent rises for new tenancies reinforces the desire to ensure that that cliff edge is not experienced and that annual in-tenancy rent increases do not, suddenly, in a single step, return to that open-market condition.

In relation to the previous issue, I refer Mr Briggs to the business and regulatory impact assessment, which was published alongside the regulations, and looks at the number of properties that are likely to be affected. The assessment models some of the possible impacts and explores the level of rent that landlords would forgo and tenants would save.

I am sorry that the Scottish Association of Landlords has chosen to use such language. I do not believe that the Scottish Government uses “anti-landlord rhetoric”—I would not acknowlegde that. During the debates on the Cost of Living (Tenant Protection) (Scotland) Bill and in relation to the development of the consultation on the wider rented sector strategy, the new deal for tenants and the development of the new housing bill, we have said very clearly that we want a private rented sector that has high standards and that is part of a housing system in which all people have their human right to adequate housing realised, and that responsible landlords have nothing to fear from regulation. Our approach is about raising the standards in places where we do not see responsible practice taking place.

We are all conscious that, within the private rented sector, there is a range of practice, a range of affordability and a range of protection of and respect for tenants’ rights. We want to encourage the best, and we want to ensure that, where standards are not as they should be, they will be raised up.

Good, responsible landlords have nothing to fear from a proportionate approach to regulation. Across many other European countries, the provision of a decent level of regulation and protection for tenants is entirely consistent with a viable private rented sector, and I think that, in fact, that is the experience in Scotland, too. Over the decades, there have been gradual increases and improvements in regulation of the private rented sector and protection for tenants at the same time as a dramatic increase in the scale and size of the private rented sector. Indeed, even during the operation of the Cost of Living (Tenant Protection) (Scotland) Act 2022 and the rent cap, the number of properties that are registered under the landlord register has gone up slightly.

I recognise that the Scottish Association of Landlords has conducted a survey of a small number of tenants, from which it appears to be extrapolating as though it proves something on the wider picture; I do not think that the data that we have demonstrates that.

The picture is already emerging and it will continue to develop. We have other powers under the 2021 act to continue to improve data collection and we can use them to gain a richer understanding of the heat networks that are in development and in operation.

As I said, we will be consulting on the wider heat in buildings proposals very soon, so the detail will be published in that. It does not affect the setting of the target for heat networks.

In the previous parliamentary session, the committee debated the targets that should be set in the act. The 2030 target was the result of a committee amendment rather than a Government proposal. The view of the Climate Change Committee, as the independent adviser, is that the 2030 target is a stretch target—a bit of an outlier. We are committed to doing everything that we can to meet it. That includes the range of actions that we have set out, including the heat network support unit, the heat network fund and trying to ensure that the heat networks that come forward are investable propositions that are also attractive to non-Government investors.

I have set out the range of actions that we are already taking to meet the initial targets that were set under the act. Today, we are proposing the 2035 target, and the act requires us to set a 2035 target.

The overall investment will come partly from public funds and partly from institutional investors. Unlike decarbonisation through energy efficiency, heat networks generate a revenue stream, which makes them potentially attractive for institutional investors. It is not possible at this point to produce an individual costing for every network that will be built between now and 2035.

That is why local authorities are undertaking their local heat and energy efficiency strategies to identify the most likely sites. Glasgow, for example, has huge potential for heat networks. It probably has significantly more potential than some less densely built parts of the country. However, it will be for the local authority to take forward individual propositions for specific networks.