Publication - Research and analysis

Second Consultation on a New Tenancy for the Private Sector: Analysis of Consultation Responses

Published: 3 Aug 2015
ISBN:
9781785445477

This report presents an analysis of responses to the Scottish Government's second public consultation on a proposed New Tenancy for the Private Sector. The consultation sought stakeholder views on proposals which had been further developed and in some cases amended following an initial consultation held in 2014.

Second Consultation on a New Tenancy for the Private Sector: Analysis of Consultation Responses
Partial EQIA and BRIA

Partial EQIA and BRIA

The final two questions asked for comments on the partial Equality Impact Assessment (EQIA) and the partial Business and Regulatory Impact Assessment (BRIA).

Question 8: Do you have any comments on the partial Equality Impact Assessment?

Summary Findings

Around 1 in 6 of the standard respondents who commented simply suggested the partial EQIA appeared reasonable or to have covered the necessary issues.

However, the most frequently raised issue did not refer to any of the protected characteristics but rather suggested that the proposals do not represent the interests of landlords and tenants equally and/or that the partial EQIA does not consider whether the proposals discriminate against landlords. Around 1 in 4 of the standard respondents who commented were of this view.

In terms of the impact on tenants, a small number of respondents agreed with the partial EQIA's suggestion that the proposals would benefit vulnerable tenants, although other respondents were unconvinced. Suggestions as to particular types of tenants who could be adversely affected included students, tenants with no renting history or those who have lost a tenancy under the proposed repossession Grounds 6, 7 or 8.

A total of 118 respondents commented at Question 8 (93 standard respondents and those supporting the letting agent campaign). A number of these respondents (around 1 in 6 standard respondents) simply stated that they agreed with the partial EQIA or that they did not expect the proposals would have any negative equality-related impacts.

However, the most frequently raised issue overall did not refer to any of the protected characteristics but rather suggested that the proposals do not represent the interests of landlords and tenants equally and/or that the partial EQIA does not consider whether the proposals discriminate against landlords[4]. Around 1 in 4 standard respondents raised these issues. Specific elements of the partial EQIA with which small numbers of these respondents disagreed included:

  • The weighting given to e-petition or postcard responses to the previous consultation on the new private tenancy regime.
  • The statements that the new grounds cover every eventuality where a landlord may reasonably require repossession or that the proposed notice periods are shorter.
  • The failure to recognise the distinction between the professional private rented sector and the minority 'rogue' element.

In terms of the impact on tenants, a small number of respondents agreed with the partial EQIA's suggestion that some vulnerable tenants need more stable housing circumstances and that the proposals would benefit these vulnerable tenants. However, a small number of others were unconvinced that there are no negative effects for vulnerable tenants or for tenants more widely. In terms of the wider body of tenants, it was suggested that they could all be affected if overall supply is reduced, good and professional landlords exit the sector, rent levels rise and standards (both in terms of property condition and management) fall.

Small numbers of respondents suggested particular types of tenants who could be adversely affected. There were concerns that students may not be able to access suitable accommodation if the absence of a no-fault ground means that it has not been vacated by the previous occupant and that rental charges may increase if it is not possible to generate income from renting to tourists outwith term time. The other most frequently made comment about specific types of tenants being affected was that landlords will become more selective and that this will have an especially negative impact on tenants with no renting history or who have lost a tenancy under the proposed repossession Grounds 6, 7 or 8.

Small numbers of other respondents suggested that the discretionary elements of the proposed repossession grounds do not go far enough to protect vulnerable tenants, that all the grounds should be discretionary or that there should be a 'Hardship Defence' if repossession may cause undue hardship for a tenant due, for example, to pregnancy, lone-parenting, old age, illness, poverty, or disability.

Amongst the small number of other protected characteristic-focused comments it was suggested that the disability section of the partial EQIA focuses on the needs of disabled tenants who require modifications to their homes but that the Equality Act definition of disability is much wider than this.

Question 9: Do you have any comments on the partial Business and Regulatory Impact Assessment?

Summary Findings

Many of the comments focused on the partial BRIA's coverage of the impact of the proposals on landlords and letting agents. Although a small number of respondents did not think the proposals would have any negative impact on businesses (around 1 in 20 standard respondents), one of the most frequently made comments by some degree was that the partial BRIA under-estimates the likely negative impact on one or both groups. More than 3 in 5 standard respondents and those supporting the SAL form-based campaign were of this view. Many of these comments focused specifically on coverage of the student and holiday let markets.

The other most frequently raised issue (also raised by more than 3 in 5 standard respondents and those supporting the SAL form-based campaign) focused on the potential impact of seeking possession through the First-tier Tribunal, particularly if using Grounds 6, 7 or 8. Common concerns included the financial cost to the landlord of tenants breaching the terms of the tenancy but being allowed to remain in the property, or of it taking a long time to evict a tenant.

A small number of respondents commented on the coverage of the impact on tenants, with issues raised including that some of the identified benefits for tenants are debatable and that if some landlords exit the sector and/or further investment in the sector is curtailed, choice will be reduced, standards may fall and rents may rise.

A total of 245 respondents commented at Question 9 (155 standard respondents and those supporting the SAL form-based and letting agent campaigns).

Many of the further comments focused on the partial BRIA's coverage of the impact of the proposals on landlords and letting agents. Although a small number of respondents did not think the proposals would have any negative impact on businesses (around 1 in 20 standard respondents), one of the most frequently made comments by some degree was that the partial BRIA under-estimates the likely negative impact on one or both groups. More than 3 in 5 standard respondents and those supporting the SAL form-based campaign were of this view.

Many of these comments focused specifically on coverage of the student and holiday let markets. It was suggested that the partial BRIA has under-estimated the likely impact on landlords and letting agents who operate student lets of the exclusion of a no-fault ground. In particular, it was suggested that the exclusion of a no-fault ground for possession means that a landlord cannot ensure that properties are available for let at the time when the vast majority of students are looking for accommodation (before the start of the academic year). It was further suggested that properties becoming vacant at any other time will be very difficult to re-let and that this could result in significant losses for those specialising in student accommodation.

Similar concerns were raised in relation to the impact on landlords and letting agents who operate holiday lets. As with landlords operating in the student market, it was suggested that not being able to guarantee possession of a property during the period when there is strong demand for holiday accommodation could affect the viability of their business. The connection was also made with student accommodation being available for the tourist market outwith term time- and in particular to meet demand during the Edinburgh Festival.

The other most frequently raised issue (also raised by more than 3 in 5 standard respondents and those supporting the SAL form-based campaign) focused on the potential impact of seeking possession through the First-tier Tribunal, particularly if using Grounds 6, 7 or 8. Common concerns included:

  • The financial cost to the landlord of tenants breaching the terms of the tenancy but being allowed to remain in the property, or of it taking a long time to evict a tenant. The types of costs identified included: legal costs; administration costs; and the cost of repairing any damage to the property.
  • The likely impact of and scale to which rent arrears could build up during longer notice periods.
  • The costs associated with taking a case to the First-tier Tribunal or of defending a case which has been taken to the First-tier Tribunal. In particular, legal costs, especially since the proposed new grounds are open to interpretation and may require some development before a body of case law exists to interpret the provisions.
  • The possible impact of introducing rent controls. This could include restricting a landlord's ability to maintain or improve their property.

With regard to the potential impact on letting agents, a small number of respondents suggested that insufficient consideration has been given to the impact of landlords choosing to exit the sector, with the follow-on impact on letting agents' turnover and profitability.

A small number of respondents commented on the coverage of the impact on tenants, with issues raised including that:

  • Some of the identified benefits for tenants are debateable. In particular, it is not clear that the plan for some grounds for repossession to be mandatory or have a mandatory component will afford greater security to tenants.
  • Tenants without a record in renting and good references may struggle to access accommodation if landlords become more selective in their choice of tenants because of the absence of a no-fault ground.
  • If some landlords exit the sector and/or further investment in the sector is curtailed, choice will be reduced, standards may fall and rents may rise.

Finally, a small number of respondents suggested that the partial BRIA does not consider the impact on two other groups, those who live in communities in which there are privately rented properties and local authorities. With regard to communities, it was suggested that the social cost to neighbours in the event that the reason for eviction is nuisance-related should be considered. In terms of local authorities, it was suggested that the BRIA should consider the resource implications for local authorities, particularly in relation to the designation of 'rent pressure areas'.


Contact

Email: Hannah Davidson