Private Housing (Tenancies) (Scotland) Bill

– in the Scottish Parliament on 17th March 2016.

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Photo of John Scott John Scott Conservative

Pressing swiftly on, the next item of business is a debate on motion S4M-15944, in the name of Margaret Burgess, on the Private Housing (Tenancies) (Scotland) Bill. Before I invite the Minister for Housing and Welfare to open the debate, I call the Cabinet Secretary for Social Justice, Communities and Pensioners’ Rights, Alex Neil, to signify Crown consent to the bill.

Photo of Alex Neil Alex Neil Scottish National Party

For the purposes of rule 9.11 of the standing orders, I advise the Parliament that Her Majesty, having been informed of the purport of the Private Housing (Tenancies) (Scotland) Bill, has consented to place her prerogative and interests, in so far as they are affected by the bill, at the disposal of the Parliament for the purposes of the bill.

The Deputy Presiding Officer:

I call Margaret Burgess to speak to and move the motion.

Photo of Margaret Burgess Margaret Burgess Scottish National Party

I thank everyone who contributed to the development of the Private Housing (Tenancies) (Scotland) Bill, including members of all parties and all stakeholders. I am grateful to those stakeholders for their considered thoughts on the bill, while the Government was shaping its policy and during the Parliament’s consideration of the bill.

I also recognise the Infrastructure and Capital Investment Committee for its detailed scrutiny of the bill as well as the Finance Committee and the Delegated Powers and Law Reform Committee for their considerations.

This afternoon’s debate on stage 3 amendments has highlighted where we have disagreed on some of the detail of the bill. However, I have been encouraged by the extent to which most Opposition members of the Infrastructure and Capital Investment Committee have been generally supportive of what the Government wants to achieve in the bill. I have been happy to work with members who have made constructive criticisms to improve the bill and I have been glad to support amendments from them and from other members who were not on the committee, such as Patrick Harvie, where that would strengthen the bill.

The position that we have reached on the grounds for repossession is a good example of the collaborative approach that we have taken. When the bill was introduced, it contained 16 grounds, 12 of which were mandatory; the bill now has 18 grounds, of which eight are mandatory, eight are discretionary and two contain elements of both. I am pleased to be able to acknowledge the committee’s contribution to the bill, which I hope will be passed at the end of this debate.

The Government published its first strategy for the private rented sector, “A Place to Stay, A Place to Call Home”, in May 2013. The strategy aims to improve and grow the private rented sector by enabling a more effective regulatory system, targeting tougher enforcement action and attracting new investment.

As part of our work around the strategy, the Scottish Government has undertaken a range of actions to improve private renting. Those include: clarifying the existing law on the charging of premium fees, so that tenants cannot be charged for getting a tenancy; setting up the tenancy deposit schemes in Scotland, to protect tenants’ deposits; legislating to create a new tribunal for private renting; legislating to regulate the letting agent industry; and providing local authorities with additional powers to tackle bad practice, where it occurs.

However, to deliver the better quality, more professional sector that we want to achieve, we recognised that we needed to legislate to rebalance the relationship between landlords and tenants, to one that is fairer and that works in today’s private rented sector.

The bill introduces an open-ended private residential tenancy, which will improve security of tenure for tenants and provide appropriate safeguards for landlords, lenders and investors. It also makes rents more predictable for tenants, with adjudication provided where rent increases take rent beyond the market rate for comparable properties. It also enables local authorities to apply for rent pressure zone designation, where rent increases in a local area are having a detrimental impact on tenants and housing.

The bill will enable tenants to feel more secure and settled in their homes and communities. One benefit of greater security for tenants is that it will enable them to assert their rights, such as being able to ask their landlord to carry out necessary repairs, without fear of arbitrary eviction. That will provide a step-change in improving the quality of private renting.

As part of striking the right balance, the bill recognises that landlords must also have confidence in their ability to effectively manage and regain possession of their property. That is why we have devoted so much time to getting the repossession grounds right.

The first-tier tribunal will play a key role in dealing with disputes under the new tenancy, providing a more accessible, specialist form of redress. During the earlier stages of the bill, I was asked about our approach to tribunal fees. I want to reassure members that we are committed to making the Scottish tribunals as accessible as possible. I am therefore pleased to announce that if this Government forms the next Administration, fees will not be charged for tenants or landlords who take a case to the housing and property chamber of the first-tier tribunal. No fees will mean improved access to justice in the private rented sector. The provision will enable tenants in particular to fully exercise their rights.

When reflecting on the changes that we expect the bill to achieve, it is worth noting that under the current tenancy, in most cases it is tenants, not landlords who end the tenancy. I expect that to continue to be the case. However, where a landlord brings a tenancy to an end, and it is disputed, the landlord will need to make an application to the tribunal to establish that they are entitled to regain possession. Landlords will need to provide evidence in support of an application. Even where a ground is mandatory, the tribunal will still need to establish whether it has been met before it can grant an order for eviction.

During stage 1, much was said about the repossession grounds, in particular those grounds that include an intention by the landlord—for example, that the landlord intends to sell the property or to live in it. Some stakeholders were concerned that those grounds might be open to misuse.

As I said earlier, it is important that we get the repossession grounds right. To address the concerns that were raised, I introduced a number of amendments at stage 2 that outlined the types of evidence that could be used to demonstrate some of the eviction grounds.

Sanctions will apply should a landlord mislead a tenant into leaving their home or mislead the first-tier tribunal into issuing an eviction order. Some of those sanctions are set out in the bill as they are specific to the new tenancy, but criminal sanctions, such as for illegal eviction, will also continue to apply.

During stage 2, Clare Adamson introduced an amendment to increase the maximum amount payable to a tenant who has been wrongfully evicted from three months’ rent to six months’ rent. I was more than happy to support her on that.

I want to ensure that tenants are made fully aware of their rights. For instance, we will include information about tenants’ rights—where to get advice, how to apply to the tribunal in disputes with the rent service, information about rent adjudication, where to go and how to get assistance—in the notices that are prescribed under the new tenancy. That is important; this bill is also about informing tenants.

The student sector also featured heavily during stages 1 and 2 of the bill. I listened to all the concerns of the stakeholders and at stage 2 I introduced an amendment to exempt purpose-built student accommodation from the provisions of the bill. I recognise that the growth of purpose-built student accommodation provides much-needed new accommodation for students and has been developed for the specific purpose of providing that bespoke accommodation, which is similar in character to the accommodation that colleges and universities provide. However, I remain of the view that in the mainstream private rented sector, all tenants should be treated the same. That is why I have resisted calls to include a specific student tenancy or ground in the bill.

The basic principle of the new tenancy is that if a person rents property to someone in the private rented sector, they need to recognise that that property is someone’s home.

Overall, we have sought to strike a fair balance in what is being proposed in the bill to ensure that the new tenancy will support a well-functioning, modern sector that works for both tenants and landlords. The Government has undertaken extensive consultation and worked constructively with members in developing the policy that underpins the bill to make sure that we have got the balance right.

We want to create a better, more professional private rented sector. The new private residential tenancy that is the centrepiece of the bill is absolutely key to achieving that.

I move,

That the Parliament agrees that the Private Housing (Tenancies) (Scotland) Bill be passed.

Photo of Kenneth Macintosh Kenneth Macintosh Labour

It is good to reach the stage in a bill where the arguments have all been made and the amendments have been won or lost. Whether or not the bill will do everything that we would wish it to do, we agree that it will improve the lot of private tenants in Scotland. I am pleased that most of us in the Parliament—with, unfortunately, the exception of the Conservatives yet again—will vote in favour of the bill at decision time.

Although I support the bill as it stands, I hope that the minister will not mind if I point out that we could have done more and we could have done it sooner. My on-going worry is that the bill does not go far enough in addressing affordability, quality and standards in the way that we would have wished.

That said, my Labour colleagues and I want everyone who chooses to live in the private rented sector to have the opportunity to make their property their home—not just a transition, not an expensive limbo in which they feel trapped and not a poor second or third choice to council or housing association accommodation, but a safe, secure, warm and affordable home.

It may take a long time to change attitudes and behaviour in this country. We may never get to the stage where private renting is regarded in the way that it is in Germany and continental Europe. However, we have today offered additional protection to private tenants and begun to address the changes that have taken place in housing tenure in Scotland over the past 10 years or so.

Before I go any further, I offer my thanks to the bill team and the committee clerks, and most of all to the two campaigns whose efforts have done most to get private renting to the top of the parliamentary and political agenda. First, I thank Shelter Scotland—that tireless campaigner for the homeless and for decent housing, which managed to sign most of us up to the make renting right campaign. Shelter is our trusted and reliable source of information, and its input to the bill has been invaluable.

Photo of Kenneth Macintosh Kenneth Macintosh Labour

Thank you, Mr Eadie.

Secondly, I thank the alliance that is the living rent campaign, which is led by the National Union of Students Scotland and includes many of the big trade unions, alongside many other housing and tenant representative organisations.

It is always a little unfair to single out any one individual but, in speaking of effective and tireless campaigners, I will mention Mike Dailly and his colleagues at Govan Law Centre. The law centre’s report entitled “Powerless: no expectations, choice or security” illuminates what can and does happen to vulnerable people in an unfair and imbalanced system when they have insufficient rights or little recourse to legal protection.

Those campaigners and many more combined to put the evidence in front of Parliament that highlighted exactly how much housing tenure in Scotland has changed over recent years and how we have ended up, after a decade of difficulty, with not simply a housing shortage but—in the First Minister’s words—a housing crisis. Only 28 per cent of young people in Scotland now own their own homes, which is down from 48 per cent in 1999. They cannot afford a deposit and, with 150,000 of them on local authority waiting lists, there is little chance of them getting a socially rented property.

The result has been a doubling of the numbers who are renting privately; the figure is now up to approximately 330,000 households. Before we all get the wrong impression of the sector, I stress that those who are renting are not always young single people. One in four of those private rented households have children, and those households are often in expensive tenancies that offer little security. The result of that combination is very troubling.

One fifth of all homelessness applications now come via the private rented sector, which represents a rise of 38 per cent in the past five years. As is too often the case, it is those on lower incomes who have been hit hardest. The Joseph Rowntree Foundation has found that a quarter of households experiencing poverty now live in the private rented sector, which is up from one in 10 a decade earlier.

I apologise to members for the barrage of statistics, but I am trying to illustrate that there has been a radical change by any analysis. For some, it means real hardship. For others, it means a depressing lowering of expectations. Today, we are beginning the process of offering greater security to those who live in the private rented sector, but the bigger housing crisis requires a range of answers, of which the most important concerns the need to address housing supply. We need to build tens of thousands more homes across all tenures.

I mentioned earlier that the minister might have done well to have listened and to have been more willing to work with Labour on the issue. l suggest that it is not too late to do so. As an aside, I understand after five years that the Government believes that consensus is a one-way system and applies only when Labour supports the SNP, but it could work the other way round, too.

Labour lodged a series of amendments to regulate the private rented sector two years ago. At that stage, the SNP voted with the Conservatives to stop those amendments. I ask members to think about how much money we would have saved private tenants if the Government had adopted our proposals then instead of waiting until now.

However, I repeat that it is not too late. Many young people in Scotland today simply do not believe that they will be able to secure or afford a home of their own. Three quarters of Scots who do not own their own home think that they never will. The expense of renting privately means that they feel trapped, and they identify saving for a deposit as the biggest hurdle. As the minister will know, Labour has outlined a plan to help people to save for a deposit with a £3,000 boost for savers.

The minister talks proudly of her record on housing, despite the fact that her Government has clearly not got anywhere near meeting the identified need. The new target that she has announced also falls short. Although 50,000 affordable homes over the next five years is an increase, Shelter, the Chartered Institute of Housing and the Scottish Federation of Housing Associations have all estimated the need at 60,000, which is Labour’s target.

Even within the Government target, we know that the figure on housing for social rent rather than simply affordable housing is the more important figure, and I urge the minister to replace her goal of 35,000 with Labour’s more ambitious, achievable and needs-based goal of at least 45,000 homes for social rent.

In all the years that I have represented Eastwood, housing has consistently been the biggest issue that constituents have raised. East Renfrewshire is a great place in which to live, go to school and bring up a family, but when a person’s family are grown, where do they live? There are very few council or housing association properties and house prices are so high that it is difficult for any young person to get their foot on the property ladder.

Just as I believe that the next Scottish Government needs to do more about the living wage, so I believe that we will have to return to the living rent. However, the bill will at least begin to address the problem of security of tenure.

We want to drive up standards in the private rented sector and we want it to expand. We want the PRS to help meet the demand—the pressing need—for housing and we want private renting to be an attractive option for investors. However, the law needs to be framed to reflect the fact that properties are people’s homes, not just a business. Today is a good step forward on that journey and Labour is happy to support the bill.

Photo of Alex Johnstone Alex Johnstone Conservative

I have reached an interesting point in the passage of the bill. I said at stage 1 that it was not possible for me to support the bill then but that I could envisage supporting it later. Sadly, it seems that the bill as introduced was as good as it got.

On day 1 of the period for lodging amendments for stage 2, 150 Government amendments landed on the doorstep. The effect was that stakeholders were trying to get me to lodge amendments to parts of the bill that the Government had already lodged amendments to remove completely. There was a process of radical change, which was ironic, given that at the start of the process the Government was determined to consult as widely as possible. I was disappointed because, when I spoke to stakeholders during the consultation stage, I told them to engage vigorously and actively with the Government to ensure that the bill reflected their needs.

As we have gone through the process, disappointment has built among a number of stakeholders. They have been disappointed by simple things such as a misunderstanding about what the private rented sector is. Certain quarters assume that it is all big business and big money—people with money to spend. However, many of Scotland’s private landlords rent out only one property or a handful of properties. Many of them are reluctant landlords who find themselves with little alternative than to permanently or temporarily rent out a property.

The bill could have done much to ensure a fair balance between landlords and tenants but, eventually, the Parliament did what it always does: it took the side of tenants. That was not necessary. We could have done everything that we have done for tenants with the bill and done something for landlords as well. Perhaps we would have done that if we had better understood what the private rented sector is.

The threats to the sector from the bill include things such as rent control. We discussed rent pressure zones during the amendment stage. I believe that, once a rent pressure zone is declared, it will create a vacuum for investment, because nobody will invest if they cannot get the return that they expect to get. The notion of rent control is potentially counterproductive, because the way that the bill sets out for increasing rents may ultimately become an agenda for rent increases, rather than a way to control them.

I have a concern, which I expressed earlier, about the loss of the initial period. The initial period had the potential to benefit both landlord and tenant if properly implemented. Its disappearance at stage 2 was one more confusing element for the stakeholders who tried to engage in the process.

I have already praised the Government, but I do so again, for its decision to act on purpose-built student accommodation. However, it turned out at stage 3 that that was a reluctant action, and the Government has perhaps stepped back from the opportunity to encourage such development.

We should have done more to create a proper balance between landlord and tenant. We could have done more to understand the differing circumstances that exist in different parts of the country and in city and rural environments. We could have done more to ensure that those who wish to invest in private tenancies can do so with confidence that they can have a tenant who will deliver for them. We could have done more to build the understanding—which some people who spoke in the debate clearly have—that a rented property with a quality tenant is a package that is more valuable than the sum of its parts.

We could also have done more to encourage new types of investment. In recent years, many of us have speculated that there are investors who are willing to become involved in building property, perhaps even on a large scale, to rent privately in the Scottish marketplace. However, having spoken to stakeholders who have watched the progress of the bill, I know that opinions have changed and opinions have been formed. I heard a simple opinion from someone who expressed his views to me on one occasion. He said that, having looked at the changed environment north of the border, he would make the simple decision to carry out his investment south of the border.

That is about confidence, about difficulty with understanding circumstances and about time. If there is a lack of confidence in the legislation among landlords, confidence can be recovered only over a period of time. I worry that investment will be lost and that we have missed a chance to bring more investment in.

Photo of Elaine Smith Elaine Smith Labour

We move to the open debate. I can give members up to five minutes at this stage.

Photo of Clare Adamson Clare Adamson Scottish National Party

I associate myself with the comments that have been made about the bill team and the clerks to the Infrastructure and Capital Investment Committee, who have stewarded us through the process. I also commend Jim Eadie for his convenership of the committee throughout the proceedings. The Private Housing (Tenancies) (Scotland) Bill has been an interesting one to be involved in, and it is probably one of the most significant bills that we have considered, as it will impact on the lives of so many people in Scotland.

I will not have time to speak on all the areas of the bill, but some things that have come up this afternoon are worth highlighting. The review period, which we had a division on, will be significant. However, as the minister said, even though the bill will be passed today, the act will not be implemented until the tribunal is in place. That is likely to be perhaps a year to a year and a half down the line. To have limited ourselves to a three-year review period would have hardly given the act a chance to get started.

It is important that we have the review and that it is based on a comprehensive understanding of how well the bill has worked to rebalance the relationship between the tenant and the landlord. If the concerns that the Conservatives have rightly raised throughout the progress of the bill about how it might impact on investment in the private tenancy sector are realised, that will be taken into consideration in five years’ time. I suspect that some of the concerns will not come to fruition, but this is about reviewing and building the private rented sector, because we know that it has become very important in Scotland.

As Patrick Harvie rightly said, we also have to understand people’s right to a home and to feeling that the place where they live is a home and a place where they have security of tenure. That is why I was so happy that amendments on the succession of the family home were lodged and discussed at stage 2, and that the minister’s amendments at stage 3 met my concerns in that area.

Unlike Mr Johnstone, I do not think that the measure is overly complicated. It relates to family homes; if the person who is named in the tenancy dies, the other people whose home it is—say, a sibling, a child of adult age or a carer who has lived in the dwelling full time as their home—will have an opportunity, if they so wish, to stay in that family home. That is very important and will go some way towards giving tenants in the private sector more—

Photo of Alex Johnstone Alex Johnstone Conservative

I remind the member that I took a very careful position on the matter and, despite expressing concern, did not vote against it.

Photo of Clare Adamson Clare Adamson Scottish National Party

I thank Mr Johnstone for that clarification, because this is a very important issue. After all, the family home is at the heart of what we are doing today.

Another area of concern that has caused division is the initial tenancy period, and I think that most of us are happy that that has gone. I come back to the very strong evidence that Councillor Harry McGuigan gave the committee on behalf of the Convention of Scottish Local Authorities on the plight of women who might find themselves having to flee domestic violence. Life is complicated; life happens to us all. Indeed, as the minister has pointed out, good and bad things can happen to people at any time. By tying people in difficult family circumstances—for example, having to move for a job or caring for someone in their family who has become ill—into that six-month period, the initial tenancy period could have been to the tenant’s detriment and caused them financial and emotional harm. I do not think that its removal will have too much of an impact, given that what we all want when a tenant agrees to a tenancy is for the landlord and the tenant to be happy and able to proceed with the tenancy in a reasonable way.

Finally, I am delighted with the minister’s announcement that there will be no fees for tenants or landlords who take cases to the housing tribunal. The measure sits very well with the commitment that the SNP Government has already given to look at having no fees for employment tribunals when we get those powers, and it shows where we sit with regard to fairness, the availability of redress to justice and ensuring that there are no barriers to the Scottish people getting justice when they require it.

Photo of Lesley Brennan Lesley Brennan Labour

In 1999, only 5 per cent of households in Scotland lived in the private rented sector but, by 2014, that figure had increased to 14 per cent. Clare Adamson is right to talk about the sector’s growing importance, given that the Government has encouraged local authorities to meet housing need through the sector. If the aim is for more people’s needs to be met through the private rented sector, it is only right that the tenancy is strengthened and that tenants have more security of tenure.

There are a number of reasons why the needs of more people are being met in the private rented sector, including the lack of affordable housing to buy, the lack of affordable finance and worsening wages and employment. However, the key reason is the residualisation of public sector housing. We have seen that with the national housing trust houses that have been built in Dundee, where the tenancies are short assured tenancies, not Scottish secure tenancies.

Photo of Jim Eadie Jim Eadie Scottish National Party

Does the member recognise that the greatest contribution to what she rightly calls the residualisation of public sector housing was the right to buy, a practice that was ended by this Government?

Photo of Lesley Brennan Lesley Brennan Labour

The right to buy stripped away properties, but the fact is that not enough houses were built in addition. The two things are not incompatible; people were very supportive of the right to buy, which leads to secure and stable communities. Anyway, I will not go into that.

Now that people are renting in the private rented sector for longer, I welcome the improvement in private tenants’ rights, particularly the introduction of the new, modern and simpler tenancy. Given that the vast majority of tenancies are short assured tenancies, I hope that the Government’s aim is to transfer current PRS tenants to the new tenancies in the same way that housing associations and councils transferred tenants from the previous form of tenancy to Scottish secure tenancies in the early 2000s.

The overarching aim of the bill is to improve security of tenure. It was disappointing that amendment 83, in the name of Patrick Harvie, which would have created a duty to review the operationalisation of the new tenancy and, specifically, to analyse in detail how changes to security of tenure work in practice, was not agreed to. I heard what has been said about the time period but, as Shelter Scotland states,

“to ensure that this security of tenure is genuine and effective for private tenants across Scotland”, it needs to be reviewed.

I also note my disappointment that amendment 89, in the name of Ken Macintosh, was not agreed to. If it had been supported, it would have led to the introduction of a private residential tenancy charter.

It is quite right that houses in multiple occupation in the private rented sector have to meet a lot of regulations, because those regulations ensure that there is good-quality housing. I recognise that HMOs account for only about 5 per cent of the sector, but they are examples of good practice—well, I can only say that they are in Dundee.

Photo of Clare Adamson Clare Adamson Scottish National Party

There is certainly no member in my group who does not see merit in what Mr Macintosh brought forward, and who does not think that a charter would be possible. However, it would not be without cost and it did not appear in the financial memorandum to the bill. As his amendment came at such a late stage, it would have been difficult for us to take it forward at this stage without delaying the bill, and we all want to see the bill go through as quickly as possible so that the protections are in place.

Photo of Lesley Brennan Lesley Brennan Labour

There may have been challenges, but the hurdles were not insurmountable. We need to improve the standard across the sector. Many non-HMO rented properties need to be upgraded, especially former right-to-buy properties. Many of those properties enter the private rented sector accidentally when somebody dies and somebody inherits their property and rents it, and those properties need a lot of upgrading. We must remember that landlords have little motivation to upgrade, especially if it affects their bottom line.

The Deputy Presiding Officer:

Can you begin to close, please?

Photo of Lesley Brennan Lesley Brennan Labour

Tenants have to chase landlords for repairs and annual gas safety checks, so we need to make sure that we put a charter in place. If more people are living in the private rented sector, they deserve better.

Photo of Jim Hume Jim Hume Liberal Democrat

I remind members of my registered interests in this debate.

My colleagues and I are supportive of the bill. We want to see the more than 330,000 households who rent privately in Scotland having greater security over their tenancy—their home. We are also happy to see security provisions put in place for those families who choose to rent, and those who cannot afford to buy a property—which is a growing problem.

We also want to make sure that market flexibility is maintained so that landlords, investors and others who want to rent out a property do not enter a rental sector that is rigid and unfairly regulated. To that end, I thank Margaret Burgess for lodging amendments to streamline and simplify the bill. I am particularly pleased to see that a number of grounds have shifted from being mandatory to being discretionary, thus giving the tribunal more discretion and power to make a more balanced decision. We supported those amendments today.

I also note that we supported the amendments that Ken Macintosh lodged on a private residential tenancy charter, as it is only right to have transparency and clarity about the rights and responsibilities of all sides. It would have been a big step forward for putting an end to exploitative renting practices. Such practices represent only a small number among the thousands of honest private landlords, but the issue must nevertheless be addressed.

I noted amendment 107. Unfortunately, Alex Johnstone is not here at the moment, but I think that his amendment would have protected tenant farmers, helping them to maintain a sufficient quality workforce on their land. I saw merits in that amendment. I am concerned that there may be unintended consequences from that amendment not being supported.

Another group that will be protected is students in the private rented sector. We do not consider that students should receive any less security from private rented sector landlords than any other tenants simply because of their status as students. As I said earlier, we listened to the concerns of the National Union of Students, the universities and private landlords, and I think that we have come to a fair position. I believe that it is fair to ensure that there is a stable market of supply and demand, and that it is promoted further. I hope that that will lead to more trust between landlords and tenants in the instances where tenants are students.

I want to strongly stress the importance of the duty that the Scottish Government has, in removing the enablers of rent prices going up at significant rates, to satisfy the demand. There is currently a highly insufficient supply of housing, which means that we cannot give any guarantee that rent pressure zone measures will provide any benefit to high-pressure areas. I am concerned that imposing rent control zones would have the opposite effect. As Crisis notes,

“there is a risk that at the end of the period of the Rent Pressure Zone rents for existing tenancies will increase to match the open market rents for new tenancies (which will not be regulated during the operation of the Zone).”

Standing by the position that I stated earlier in the progress of the bill, my colleagues and I find regulating from the top down an unattractive and potentially harmful solution with regard to housing investments. We are where we are, but what we should be doing is providing long-term, sustainable and desirable solutions through the supply of more housing. Scotland currently suffers from a housing crisis, and I will continue to hold the Scottish Government—whoever is in government—to account for the provision of enough homes for social rent, homes that are affordable and, above all, homes that meet the needs of our people.

I am supportive of this bill and the positive changes that I hope it will bring in overhauling the security of tenancy for hundreds of thousands of people. My colleagues and I will support it at decision time today.

The Deputy Presiding Officer:

Given the way that you started your speech earlier, Mr Hume, I am delighted that you did not start that one with a high five.

Photo of Patrick Harvie Patrick Harvie Green

The pressure is on me, then.

I am grateful for the opportunity to speak in the closing stages of the debate on an important bill. I am particularly pleased by Alex Neil’s announcement that the Queen is happy with the bill and the way in which it will impact on her interests. I know that the Scottish ministers own the Palace of Holyroodhouse, across the road, but I do not know whether the Queen pays rent. If she does, I hope that we are not gouging her—I know how difficult things can be for big families in these difficult times.

When I was elected in 2003, I found myself, somewhat unexpectedly, a member of the Communities Committee, which dealt with housing, among a number of other responsibilities. One of the first pieces of legislation that we had to deal with was subject to an amendment—lodged by Cathie Craigie, I think—that introduced the landlord registration scheme. It was clear that we were in a process of incremental change in how we deal with housing—in particular, private rented housing. Under two sessions of Labour-Liberal Democrat Administrations and two sessions of SNP Administrations we have seen continuation of that incremental approach.

There has never been one big bang to transform everything, but we have seen the system of landlord registration established, although it has perhaps been underresourced at local level and has perhaps not delivered everything that we hoped it would deliver. There have been improvements in physical standards and the service that we expect private rented sector landlords to provide. There has, more recently, been the abolition of the right to buy, which often led to housing shifting generationally from being social rented housing to being privately rented properties—gradual creeping privatisation of that housing. There has been the establishment of a regulation system for letting agents, which we look forward to having some effect—although, like landlord registration, it might do much but perhaps not everything that we hope that it will, and we might need to continue to revise and strengthen it. Now, we have the Private Housing (Tenancies) (Scotland) Bill, with a reformed private tenancy and the beginnings of a system of rent control.

Despite that incremental change, and despite the general policy intent of the Labour-Liberal Dem and SNP Administrations, we have seen another change that I do not think was the policy intention of either: the private rented sector has not just grown, but has replaced a great deal of other previously more-available forms of housing tenure. It is legitimate to regard housing simply as a financial transaction and something to be to be privatised, just like so much else that we have privatised in our economy. I do not support that point of view and I think that most members would not support that ideological point of view, either, but that is what has happened. We have allowed it to happen on our watch, collectively.

There are countries in Europe that take a very different approach—that say that the distinction between social rented housing and private rented housing should not be as sharp as it is in this country. There are countries in Europe that require equal standards of regulation and affordability and in physical standards of quality in housing, regardless of the provider. Whether the provider is private, third sector or municipal, the level of housing subsidy may be the same, and that subsidy benefits the tenant, rather than the private provider, in the case of the PRS.

If we are to get to that point, it will require full-scale reform and a conscious decision to say that the private rented sector exists and the social rented sector exists, but we will not have that hard and fast division between the two because, fundamentally, all housing is social. I repeat—all housing is social. It is intimately bound up with our quality of life, with whether our community is coherent and cohesive—or fails to be—and with the health of our society.

The Deputy Presiding Officer:

Draw to a close, please.

Photo of Patrick Harvie Patrick Harvie Green

Either way, there will be continuation of that gradual incremental change and of constantly fighting to catch up with wider changes in the economy that we are not in control of, or there will come a point at which we will have to be more radical and bold. I hope that the next session of Parliament takes the latter course.

The Deputy Presiding Officer:

Many thanks. I ask the next two members to stick to a maximum of five minutes. Jim Eadie will be followed by Siobhan McMahon.

Photo of Jim Eadie Jim Eadie Scottish National Party

Thank you. I welcome the opportunity to speak at stage 3 in support of the Private Housing (Tenancies) (Scotland) Bill. The Infrastructure and Capital Investment Committee, which it is my privilege to convene, consulted widely on the provisions of the bill and made a series of recommendations in its stage 1 report. That has allowed for proper scrutiny of, and further amendment to, the bill’s provisions as it has progressed through its legislative stages.

The bill, which we will pass at decision time this evening, will, I believe, meet the requirements of a modern private rented sector. It balances—or, rather, rebalances—the right of the tenant to feel secure in their own home with the right of the landlord to regain possession of their property. It balances the right of a tenant to take their case to an independent tribunal with the right of a landlord to recover rent arrears. It also balances the need to ensure continued investment in the private rented sector with the right of a tenant to challenge an unreasonable rent increase. All those rights are important, but striking the right balance between them is absolutely critical. I believe that the bill that the Government has brought forward, as amended, is both fair and proportionate.

The committee made it clear in its stage 1 report that it supported the Scottish Government’s intention to create for the modern private rented sector a clearer and simpler tenancy regime that is fit for purpose. The majority of the committee also agreed that the no-fault ground should be removed, and we called on the Scottish Government to continue to work with landlords and letting agents during the bill’s passage to help to ensure that the 16 new grounds strike an appropriate and proportionate balance between tenants and landlords.

A key change that was made at stage 2 is that purpose-built student accommodation that is built by private providers will be exempted from the bill’s provisions, as student accommodation that is provided by further and higher education institutions already is. That change was a direct consequence of the committee’s recommendation.

I would like to associate my remarks with those of previous speakers, including the minister, who have said that in the mainstream private rented sector all tenants should be treated equally.

Another key change is that the balance between mandatory and discretionary eviction grounds has shifted towards there being more discretionary grounds—again, that is in response to the committee’s recommendations. The majority of the committee called on the Government to give further thought to which of the grounds for repossession should be mandatory and which should be discretionary. After stage 2, eight grounds are entirely discretionary, two grounds have mandatory and discretionary elements and the remaining eight grounds are mandatory.

On rent arrears, the committee recommended that the Scottish Government give further consideration to lengthening the three-month period that was allowed in the bill to pay off one month’s rent arrears. The Scottish Government responded by saying that

“more time should be provided for tenants to pay off their rent arrears” and indicated that it would lodge an amendment. The outcome is that ground 11 relating to rent arrears is now mandatory in more limited circumstances than was previously the case. Specifically, it is mandatory only if the tenant is in arrears by rent of one or more months on the day when the tribunal considers the case.

Another issue was removal of the initial period in cases of domestic abuse. That topic was raised in the committee, which can be pleased that we brought about further amendment to the bill, such that people who are in abusive relationships can leave a tenancy without facing financial difficulties as a consequence.

The bill has also been strengthened at stage 3 in respect of the measures on the death of a tenant and succession to tenancy, which Clare Adamson raised at stage 2. Again, we can be proud of how the bill has been strengthened in that area.

Another key committee recommendation was that operation of the tenancies provisions should be reviewed post implementation. The Government accepted that in its response to our stage 1 report. A number of stakeholders have called for the review to consider in detail how the tenancies provisions on security of tenure are working in practice in order to ensure that that security of tenure is effective for private tenants across Scotland.

I very much welcome that the bill will rebalance the relationship between the landlord and the tenant in favour of the tenant. It will not only safeguard the rights of tenants, but will strengthen those rights while ensuring that we continue to see investment in the private rented sector. I am delighted, for all those reasons, to support the bill at stage 3.

Photo of Siobhan McMahon Siobhan McMahon Labour

As I said at stage 1 of the Private Housing (Tenancies) (Scotland) Bill, I welcome a lot of what the Scottish Government and, in particular, the minister, Margaret Burgess, have proposed. However, I remain frustrated that we have not done more with the opportunity that has been put in front of us. In particular, I am frustrated that my colleague Ken Macintosh’s amendment to establish a private residential tenancy charter, which would have driven up standards in the private rented sector, was defeated this afternoon. That would have seen those tenants who rent in the private sector being given the same rights as those who rent in council or housing association homes.

As the minister knows, I raised at stage 1 the issue of the delay in establishing the new tribunal system. I said that I was surprised that, despite the legislation having been agreed in 2016, we will not have the tribunal system up and running until December 2017. The first-tier tribunal system is essential in making the legislation work. In her opening remarks, the minister called it the key component.

In its briefing for today’s debate, Shelter Scotland said:

“importantly, the new private residential tenancy alongside the transfer of private rented sector cases from the sheriff court to the First-tier tribunal will provide greater certainty and clarity for private landlords”.

Therefore, it is essential that we get this part of the system right, and I support the minister in doing that. However, she has yet to explain why the introduction of the tribunal system has been delayed and how that will affect the implementation of the bill. I would welcome clarity on the matter when the minister is summing up.

I have also asked the minister previously to work with organisations to make sure that the changes to the private rented sector are more widely known. I know that she is open to the suggestion, and I hope that a public awareness campaign on the changes will be actioned by her in the near future.

An issue that was spoken about throughout consideration of the bill was greater flexibility for those who wish to leave their tenancy as a result of domestic abuse before the initial six-month period has come to an end. The minister took those concerns seriously, and I am pleased that she has acted to make changes. I am sure that the bill will make a difference to many people’s lives. However, I would welcome more information on that during the minister’s closing remarks.

As I said, I welcome the bill and the changes that have been made at stages 2 and 3, although I would have liked further progress to be made in some areas. It is vital that the Parliament, whether that is all members or a committee of members, scrutinises the implementation of the bill in the next few years, because we need to know that it has worked for those we are trying to protect and that the sector is truly fit for purpose. I am therefore disappointed that Patrick Harvie’s amendment 83 was defeated this afternoon.

Some members may know that this speech will be my last in the chamber. I have had the unexpected but immense privilege of representing the people of Central Scotland in Parliament for the past five years. I am extremely proud of my record, as the youngest female and the Scottish Labour Party’s only disabled member in Parliament. However, I am most proud of being able to serve my area and my party with my dad by my side. I am delighted that I get to end my contribution to the Parliament with my former boss Ken Macintosh and my dad this afternoon, especially on St Patrick’s day.

I am looking forward to the arrival of my first child in July, spending time with my nine-month-old niece, Sophia, and spending some quality time with my husband, John. I am not sure that he is equally looking forward to that quality time, but we are about to find out.

When I made my maiden speech on 2 June 2011, I quoted from my dad’s maiden speech, as I felt that his words would give me the encouragement that I needed. I have decided to conclude my speech with those same words, as I feel that they are relevant to the debate and to the future of our country. He said:

“It is only right that the first aim of this Parliament is the creation of prosperity for this country. However, if we do not work to ensure that nobody is in any way excluded from access to that prosperity, we will undoubtedly fail the people.”—[Official Report, 16 June 1999; c 438.]

Thank you. [Applause.]

The Deputy Presiding Officer:

On behalf of the Parliament, I thank you for your service and wish you all the best, particularly with the imminent arrival.

We move to the closing speeches.

Photo of Alex Johnstone Alex Johnstone Conservative

I will keep this short and simple. I explained in my opening remarks that I feel that we could have done better and that the bill at stage 1 was better than the bill that we have at stage 3. When decisions are taken tonight, the Conservative Party will stand with the private rented sector and will vote against the bill. That does not mean that we do not wish the circumstances of those who rent in the private rented sector to be improved, but we feel that an opportunity has been missed to encourage investment in the sector simply because the Government is pursuing the requirements of tenants and ignoring the requirements of landlords.

Landlords in the private rented sector are quite often reluctant landlords and small investors. Often, they are individuals with a single property. If they are encouraged to do the right thing, they will do it, but they do not necessarily have the money to do it right now or when we wish them to. We need to encourage confidence among landlords, large and small, and encourage people to invest in the sector. We need to encourage people to take the industry forward as an industry—I use that word advisedly. It is an opportunity for many to invest in serving the needs and requirements of others. We should encourage and support people to do so.

If the effect of the bill is to take confidence away from those who currently invest in the sector, as I worry will be the case, a sector that we have relied on at a time when Government has not been investing in housing as it perhaps should have been will lack the confidence to expand further. The reason why we have high rents in some areas is not that there are too many private rented homes; it is that there are too few. If we can encourage growth in the sector, that can be a significant part of dealing with Scotland’s many housing problems.

The Conservatives will continue to participate in the process of legislating in the area. Maybe some day, there will be enough of us to actually influence things for the positive—who knows? With an election on the horizon, we can be optimists. You never know.

Photo of Alex Johnstone Alex Johnstone Conservative

I hear from behind me the sound of my Green colleague Patrick Harvie, with whom I have had many an argument over the past few years. I would be delighted to accept his intervention.

Photo of Patrick Harvie Patrick Harvie Green

I do not intend my intervention to be hostile; my question is genuinely out of interest.

Photo of Patrick Harvie Patrick Harvie Green

Alex Johnstone seeks the further growth of the private rented sector. How much should we be comfortable with the idea that the private rented sector should grow? Should it come to dominate all our housing economy, or will we reach a limit at some point?

Photo of Alex Johnstone Alex Johnstone Conservative

I believe that home ownership is the ideal that we should encourage wherever possible. However, I also believe that the private rented sector can not only succeed; in his contributions today, Patrick Harvie has demonstrated that it is very successful in other parts of Europe. I simply disagree on how we might achieve that in Scotland.

Patrick Harvie and I will always disagree courteously; I think that we have always done that.

The Deputy Presiding Officer:

You should draw to a close, please.

Photo of Alex Johnstone Alex Johnstone Conservative

We will always disagree because, unlike Patrick Harvie, I believe in the market and will never deviate from that position.

Photo of Michael McMahon Michael McMahon Labour

I have no hesitation in welcoming the passage of the bill, which will go a long way towards securing many of the rights for private sector renters and their landlords that Labour members have longed for. However, it could have done much more. That is why we supported in particular Patrick Harvie’s amendment 83, which called for a review after three years. That raises an overall concern about post-legislative scrutiny in the Parliament. An opportunity has been missed by failing to support that amendment.

The bill certainly introduces powers that are long overdue. Shelter in particular has campaigned for such legislation for the past 10 years. I congratulate it and all the other housing groups that have fought hard to get us to this point. However, I agree with Ken Macintosh that it is regrettable that some of what we are doing could have been done when we previously looked at housing legislation.

Renters in the private sector have had too few housing securities for far too long. They could face no-fault eviction, and they have faced unexpected rent increases, possibly multiple times in one year. Renters do not even know whether their landlord has a criminal history, and they still have little power to hold their landlord accountable for maintaining homes to a habitable standard. Indeed, complaining about the condition of an accommodation’s amenities could still lead to the tenant being met with eviction.

That is not to say that the bill does not make valuable progress in increasing renters’ security in their tenancies and potentially improving the overall quality of life of many private sector renters. It does that, which we welcome.

The bill requires landlords who want to evict their tenants because they intend to repurpose the property or house their family to show evidence of that intent. It is well past time that we arrived at that outcome.

As the minister and others have said, the bill is not only about tenants; landlords will also receive desirable securities. For many, the payments that they receive from their property form their livelihood. The bill gives them greater security by ensuring that they will have at least one month’s notice before renters leave, which could adversely affect a landlord’s income. It gives landlords an avenue for raising rents if they have made improvements to their let property, which is only fair.

Although the bill offers timely protections to landlords and private tenants, it should be appreciated that they will remain insufficient for many tenants. The protections that they will have are good, but they might not be good enough. I remain disappointed that we could not reach an amicable outcome on many of the amendments that Labour lodged.

I acknowledge that, after hearing debates at stages 1 and 2, the minister moved in a number of areas, but today the Government rejected amendments from us that had the full and widespread support of organisations such as Shelter Scotland and the National Union of Students. Those amendments would have provided even greater protection for the renter than the bill offers.

That it remains the case that a renter can be evicted for one month’s rent arrears is a huge failing in Labour’s view. I understand that there is a need to strike a balance between the competing interests of renters who do not make timely payments and landlords who deserve their income, but I find it hard to believe that the SNP thinks that failing to make one month’s payment on time qualifies as that balance.

I have heard strong arguments for three months’ arrears being necessary before a renter can be evicted, with a tribunal hearing being required for earlier eviction in the event that the renter is unlikely to make their payments, but we put forward a compromise of two months’ arrears in an effort to improve the bill. That was rejected—even that compromise was deemed too much for the Government.

As Siobhan McMahon said, our amendment to establish a private residential tenancy charter that would drive up standards in the private rented sector was also rejected. I would like to clarify our position. That proposal did not drop out of thin air. The consultation on the bill and the accompanying debate were about driving up standards, habitability and quality. It was because the Government failed to put into practice in the bill what the consultation identified that we lodged an amendment at stage 3 to achieve that. What we are talking about is not an add-on from nowhere; it came out of the consultation. Our proposal should have been supported.

Everyone in Scotland deserves a safe, warm and secure home. We recognise that too many young people in Scotland are stuck in a cycle from which they cannot escape. They end up renting to save for a deposit, but the rent is so high that they cannot put enough money away. Because we understand that problem, we pressed for better standards in the private rented sector and tried to offer more protection for private renters from bad landlords than the Government proposed.

I know that the Presiding Officer was concerned about Jim Hume’s overly informal introductory comments at the start of this afternoon’s proceedings, but I hope that she will indulge me by allowing me to make a personal comment about my daughter’s contribution. Siobhan indicated that she saw me and Ken Macintosh as bookends: Ken was her boss and I am her dad. I have to reject that, as that would suggest that what she has done in the Parliament has been a book, for which we are the bookends. I do not see it that way. She has written only a chapter of her life in here; she has much more to do. [Applause.]

Photo of Margaret Burgess Margaret Burgess Scottish National Party

I am grateful for the general support for the bill that we have had from members across the chamber. There has been absolute recognition of the fact that the bill is about rebalancing the relationship between landlords and tenants so that it works for the modern private rented sector. I believe that the amendments that were agreed to at stage 2 and those that were agreed to today have helped us to get the balance right.

By that, I mean that we have recognised that those who rent in the sector need and deserve greater security than is available at present. That is true generally, but it is especially the case for the increasing number of families who rent privately. I believe that the result is a fairer balance in the relationship between tenants and landlords. That includes balancing improved security and stability for tenants with proper safeguards for landlords, lenders and investors. That is very much part of our broader approach to reforming the private rented sector to make it a more professionally managed and better-functioning sector that provides good-quality homes.

A number of members asked why the Government did not support the amendment on a private residential tenancy charter. We have a strategic approach to improving the sector that is set out in our private rented sector strategy. Michael McMahon said that the charter proposal had been talked about previously.

Photo of Michael McMahon Michael McMahon Labour

I would like to correct that—I did not say that; I said that the proposal had not appeared from nowhere. It was a result of the discussions that took place during the bill process.

Photo of Margaret Burgess Margaret Burgess Scottish National Party

As Clare Adamson and Jim Eadie both said, the issue did not come up once at the Infrastructure and Capital Investment Committee. No stakeholders made such a proposal to me. Although the charter that Ken Macintosh proposed might seem like an attractive idea, it would mark a huge policy shift. Such a provision was not included in the bill and was not costed, so we have no way of knowing the scale of the financial burden that it would impose. That in itself is enough reason not to include it in the bill. To have included it would have been a total shift in policy. It was a new policy proposal that we had not considered, nor had we consulted on it at any stage during the passage of the bill. That is why we did not accept Ken Macintosh’s amendment.

Photo of Kenneth Macintosh Kenneth Macintosh Labour

There is no point in renewing the arguments; we lodged amendment 89 and it was defeated. However, on cost, does the minister recognise that our proposal would not have created a new body or set up a new tribunal but would have simply granted a set of rights, which tenants would have been able to enforce through the existing body, which would have involved no costs whatsoever? [Interruption.]

The Deputy Presiding Officer:

Will members please be quiet as they enter the chamber?

Photo of Margaret Burgess Margaret Burgess Scottish National Party

Ken Macintosh and all the members who spoke in favour of the proposed charter compared it to the Scottish social housing charter, which applies in the social rented sector. There are considerable costs involved in relation to that charter, because the sector is regulated and the charter is regulated and scrutinised. We needed all the information in that regard. We could not add something to the bill without having that kind of detail, which was lacking in the proposal that was put forward this afternoon.

I think that all members recognised that increasing housing supply will impact on rents across the housing sector—[Interruption.]

The Deputy Presiding Officer:

Order. If members could wait another four minutes before having their conversations, I would be most grateful.

Photo of Margaret Burgess Margaret Burgess Scottish National Party

Ken Macintosh said that the target that we have set, which we will work towards if we are re-elected in the next parliamentary session, is not ambitious enough. The target is for a 67 per cent increase in affordable housing supply and it is higher than the proposed target in the Commission on Housing and Wellbeing’s report. We have backed that up with more than £3 million of investment, and we are saying that we will deliver on the target. We delivered on a target of 30,000 affordable homes, and we will deliver on the target of 50,000—at least 50,000—homes.

Alex Johnstone said that we are discouraging investment in the sector. I do not think that that is the case. I think that people are still interested in investing in the sector. The cabinet secretary is working hard on that. Alex Johnstone suggested that investors will go south. He might want to have another look at what George Osborne did yesterday; he might not remain of that view. I do not think that investors will go south.

Siobhan McMahon made a very reasoned and considered speech in the debate, as she always does. She said that it was her final speech in the chamber; this is my final speech in the chamber, too. She talked about the issues in a measured and thoughtful way. She asked about the tribunal system, which is an issue that she has raised with me before. I can tell her that the introduction of the new private residential tenancy and the tribunal will be aligned. It is important that she knows that.

I wish Siobhan well, and I wish her well for the birth of her baby. [Applause.] I am also quite sure that her father is not just a bookend. [Laughter.]

As I said, this is my final speech in the chamber, because, like many members, I am standing down. I agree with Siobhan McMahon and every other member who has made their final speech in the chamber that it is a privilege to be here. We all recognise that, every day. It has been a privilege to represent the people in the area where I live, and it has been an honour to be part of the Government of my country, which is something that I would never have envisaged when I joined my political party almost 50 years ago—[Interruption.] That is me giving away my age, and why I am retiring.

I thank the Presiding Officers. I also thank all the staff in the Parliament—the security staff, catering staff, maintenance staff, staff in all the committees and allowances staff—for their help. It is a great honour to have this job, but it is also a great place to work because their can-do, can-help approach makes it so. All of Scotland should be proud of this Parliament. [Applause.]

All of us, no matter what party we are in, involve ourselves in politics to make a difference to the lives of people in communities. If we pass the bill, it will make a positive difference to people who rent in the private sector in Scotland. To put it in the terms that Shelter used, I believe that we are getting renting better. The Parliament should be proud of that, too.

The Deputy Presiding Officer:

Thank you, minister. We thank you for your service and wish you well for the future.

That concludes the debate on the Private Housing (Tenancies) (Scotland) Bill.