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Reforming renting

As Wales prepares to end no-fault evictions, Natasha Miller reflects on the early lessons from changes to the private rented sector in Scotland.

As with the rest of the UK, the housing landscape in Scotland has seen a dramatic shift over the last 20 years with around 200,000 more households living in the private rented sector (PRS), now 15 per cent of all homes and triple the figure recorded in 1999. Conversely, the number of households living in social renting and owner-occupation has contracted in the same timeframe. Whether through choice or necessity, more people than ever are now calling the PRS their long-term home, including 40 per cent of all 16-34-year olds and families accounting for a quarter of all households in the sector.

Since 2000 there has been a steady stream of regulation aimed at improving standards across the PRS including landlord registration, the repairing standard and clarification on letting agent fees.

Despite this, a disproportionate number of Shelter Scotland advice work continues to be focused on tenants in the PRS (accounting for 36 per cent of all cases in 2017/18). Standards and quality of housing stock, understanding of tenancy law, poor property management, and unlawful, or ‘revenge’ evictions are all too frequently reported by our clients across the country. This has been underpinned by an over-arching lack of housing security for those living in the sector, often leaving tenants feeling powerless to pursue what forms of redress were available to them where their limited rights were infringed.

Following over a decade of campaigning, Shelter Scotland was delighted to see the Scottish Government begin consulting on the future of the PRS in 2014, culminating in three key reforms – a new private residential tenancy (PRT), a new tribunal and letting agent regulation – coming in from late 2017. So what has the impact been so far?

New tenancy regime

Subject to a few exceptions, all new PRS tenancies, created on, or after 1 December 2017, will now be PRTs regardless of what tenancy agreement a landlord asks a tenant to sign (ie tenants can’t contract out of their minimum legal rights).

Unlike the old-style tenancies, PRTs are for an indefinite period of time and can only be ended by tenants serving 28 days’ notice on their landlord, or a landlord providing 28/84 days’ notice to their tenant (depending on the ground and length of time the tenant has been in the property). Landlords must also state at least one of 18 legally recognised grounds for bringing the tenancy to an end. Crucially, none of the reasons include what has become known as the ‘no fault’ eviction ground – a key feature of the old style short assured tenancies. For a summary of the 18 grounds see www.mygov.scot/private-tenant-eviction/tenants-with-a-private-residential-tenancy/.

Under the previous regime, tenants might have been worried about raising grievances with their landlord around disrepair or rent increases. By contrast, a big driver for reform was to reduce that fear by ensuring that landlords must have a legitimate reason for bringing a tenancy to an end. Further, tenants can now more confidently insist on their landlord needing to secure a formal order at the end of the tenancy, whereas under the old short assured tenancy regime, there was little point in doing so.

Introduction of a dedicated PRS housing tribunal service

That leads onto the second PRS development in Scotland – the introduction of a dedicated tribunal service for private rented sector cases – the First-tier Tribunal for Scotland (Housing and Property Chamber). Not only is this a completely free service for tenants and landlords to access, but the process is designed to be straightforward enough that no party should require legal representation.

Should a tenant disagree with the reason their landlord is seeking to evict them, they are entitled to have the ground tested at the Tribunal in front of at least one housing specialist. If it later transpires that the landlord misled the Tribunal or tenant (even where the tenant left before an eviction order was obtained), the tenant can raise an action at a later date for ‘wrongful termination’ of their tenancy, attracting a fine of up to six months’ rent.

National letting agent register and code of practice

 And all good things come in threes, it is said, So, in Scotland, the third of the big changes in the PRS was the introduction of letting agent regulation. From 1 October 2018, anyone managing property in the private rented sector, on behalf of someone else, for financial benefit, is legally obliged to have applied to join the national letting agent register. Agents are also expected to have obtained a specialist qualification in managing properties and abide by all aspects of a new Letting Agent Code of Practice.

Where a tenant or landlord believes that their agent has breached the code, and exhausted the company’s internal complaints process, they now have an alternative form of redress via the Tribunal service. This can result in an enforcement order being issued against the agent, setting out the steps they must take to rectify the issue, including a requirement to pay compensation. Where an agent thereafter breaches an enforcement order, they face criminal sanctions, including removal from the letting agent register itself.

Impact of changes

With other parts of the UK now embarking on a similar path of reform there has been understandable interest in the impact of changes in Scotland so far. It is still very early days, of course, but the main themes are clear.

More security

The changes have been widely promoted as heralding a ‘new dawn’ for private renting in Scotland, seeking to address the power imbalance that existed between landlords’ and tenants’ rights. At the heart of the recent reforms was cross-sector consensus that the PRS needed to be fit for purpose for tenants and landlords alike, particularly given the increasing number of families and vulnerable people relying on renting for long-term housing.

Early indications are that PRT tenants do feel more secure in their homes. However, we are still very much in transition phase still with large numbers of people still on old-style tenancies and, more generally, everyone still getting used to new rules. So it will take three to five years to really get a sense of change here.

No sudden hike in rents

What we can say, with greater certainty, is that the new tenancy has not directly led to a sudden increase in market rents or landlords leaving the market en masse (two of the spectres raised in any time of reform). Rents in Scotland are currently rising less quickly than in other parts of the UK, although affordability remains an issue.

No significant increases in homeless applications

Similarly, the introduction of the new tenancy has not coincided with any unusual rise in homelessness emanating from the PRS. Even if a few landlords have left the sector, to date, we have seen very little impact on renters across Scotland as a whole.

Interestingly, conversations with letting agents, landlords and those who engage with both on a regular basis, have indicated that the changes to mortgage interest relief appear to be of far greater significance to landlords than the introduction of the new tenancy regime.


It’s also important to acknowledge that the reforms have in no way addressed the wider issues around affordability in parts of the sector for those on lower incomes or residing in high pressure markets, such as the Edinburgh city-region.

Provisions were included in the recent package of reforms to enable local authorities to apply for areas to be designated ‘rent pressure zones’ in a bid to limit the rate at which rents can increase.  To date, no local authority has come close to using those powers, with such glaring design flaws in the legislation being cited as a barrier.

What next?

So, what might be lessons for Wales? We are rightly proud that Scotland has led the way in relation to PRS reform in the UK, but we know the changes aren’t perfect. As well as affordability issues largely remaining untouched by the recent reforms, there are certain eviction grounds that are potentially open to abuse and less favourable notice periods for tenants within the first six months of their PRT for example.

If growth in the sector continues, enforcement will almost certainly need to be taken up a gear which, at present, largely relies on tenants enforcing their rights or sufficient local authority capacity to address bad practice and promote high standards.

It is therefore crucial that, over the next few years, there is a continued focus on promotion of the changes to ensure that tenants, as well as landlords, are aware of their legal rights and obligations and feel empowered enough to enforce them.

Monitoring of Tribunal decisions will play a key role in assessing the impact of the recent reforms over the next few years, highlighting any loopholes or unintended consequences of the legislation as well as successes. PRS data collection remains an ongoing issue though, and, if not addressed, may significantly reduce the effectiveness of the new legislation as well as our ability to assess if it has achieved its desired aim; a private rented sector in Scotland that is fit-for-purpose.

And, above all, change takes time!

Natasha Miller is private renting project manager at Shelter Scotland

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