Hannah Slater: Tenancy reform is good – but it’s not enough

Hannah Slater

“Five years on from tenancy reforms by the Scottish government, this report is a valuable barometer of the impact of changes for tenants, landlords and the private rental sector as a whole.”

Hannah Slater, Programme Manager for the Nationwide Foundation’s Transforming the Private Rented Sector programme.

Across the UK, private rented housing is unaffordable, insecure, and unsafe for too many tenants. Major private renting reforms were introduced in Scotland from 2017 aiming to rebalance power relations between landlords and tenants, so that tenants could better assert their rights, challenge rent rises, and ask for repairs.

The Nationwide Foundation believes that much can be learned from the Scottish experience of renting reform. That’s why we are pleased to fund the RentBetter project by Indigo House, which is gathering longitudinal evidence to understand how the changes in Scotland are impacting tenants and landlords. The first wave of the research found that the changes were beneficial for tenants in general.

The wave two findings, published today, focus on the experiences of tenants on lower incomes and those in housing need. These findings come at a useful time, as the Scottish government develops its plans for further tenancy legislation in 2024, and the government in Westminster has just announced a Renters’ Reform Bill to deliver ‘once in a generation’ change for renters.

New Scottish tenants’ rights aren’t accessible to all

The research shows that more needs to be done to support low-income private renters to ensure that they are able to benefit in practice from increased rights in legislation. The evidence from Scotland shows that tenancy reform in isolation is not enough to adequately improve security, property conditions and affordability for this group of renters. The weak market power of tenants on low incomes means that they still fear to ask for repairs or challenge their landlord, worried about reprisals like rent rises – or worse, eviction – when their access to other housing options is severely limited.

The First Tier Tribunal (Property & Housing Chamber) in Scotland was set up to take pressure off the courts with housing cases. But just 4% of all applications to it in 2019-20 were for repairs, despite the private rented sector having the worst conditions of all tenure types in Scotland. This suggests that the system does not sufficiently enable tenants to bring forward repairs cases.

It’s also concerning that the researchers spoke to a tenant who was evicted after successfully taking the landlord to Tribunal regarding repairs. The eviction notice used repossession ground one (landlord selling the property – a mandatory ground at the time), yet soon after he had moved out, the property was relet to new tenants.

Lower-income tenants face barriers to using redress systems

Local authorities and the courts and tribunal system should ensure that renters’ rights are upheld in Scotland and England, but it’s clear that they require more capacity and resources to meet demand. The private renting enforcement system must target poor standards at the bottom of the market, where low-income tenants have less power to challenge landlords.

In England, a new ombudsman has been announced to support private renters to get repairs done and take pressure off the courts. Unless this ombudsman is well-resourced to meet demand, and is simple and accessible for renters, the evidence coming from Scotland suggests that it will struggle to deliver improvements for tenants. There are protections from revenge evictions in England if private renters contact their local council about unsafe property conditions in their home, and similar protections are needed when going through the ombudsman. Otherwise, it will be a risky move for renters to seek redress in this way and few will do so.

In England’s forthcoming reforms, the government should ensure safeguards for tenants where property sale or landlord/family moving in repossession grounds are used, to prevent revenge eviction by the back door. The Renters’ Reform Coalition suggests that reform should include protection from these grounds being used for two years from the start of a tenancy; requiring a high level of evidence from the landlord for the grounds to be used; and a compensation payment to tenants evicted under these grounds, which would discourage use and help mitigate the financial hardship for tenants.

Advice and supply are key to boosting private renters’ confidence

Independent information and early advice are critical to help renters better understand and exercise their rights, but worryingly, the study found evidence of reducing provision in face-to-face Scottish advice services over the last three years. This decline began even before the pandemic. It’s clear that more investment in advice services in Scotland and England will improve the ability of private renters to realise their rights.

The research found signs of reduced private renting stock in Scotland. Furthermore, while the same number of landlords interviewed expected to stay in the market as those who expected to leave, those renting to parts of the market considered to be riskier – particularly student housing and the low income/benefits market – were more likely to be thinking of leaving.

Policymakers across the nations should also consider the implications of a reduction in the stock of privately let homes, which would adversely impact on low-income tenants by further weakening their market power. In the short term, governments should consider increasing support to landlords who wish to rent to low-income tenants and those on benefits, as well as energy efficiency improvement grants to landlords renting to low-income households. The latter would support landlords to stay in this market and reduce energy costs for vulnerable renters.

What’s next?

While the reforms in Scotland have improved the rights of private renters overall, the RentBetter research demonstrates that improving the rights and experiences of private renters on low incomes across the UK nations is complex and will require addressing challenges that sit beyond the confines of private renting policy.

In addition to better resourcing of enforcement systems and advice services, governments must tackle the challenges of precarious low-paid work, the barriers of the benefit system which often does not support tenants or landlords, and the wider cost of living. In the long term, a significant increase in social housing is needed across all nations so that the needs of financially vulnerable private renters can be better met.

Five years on from tenancy reforms by the Scottish government, this report is a valuable barometer of the impact of changes for tenants, landlords and the private rental sector as a whole. We look forward to learning from the final wave of RentBetter research in 2024 and in the meantime, this research provides insight into the policy and practice solutions needed across the UK to deliver improvements for private renters.

You can sign up for information on forthcoming webinars on the research findings and their implications for Scotland and England on the RentBetter website.