Council To Discuss - Private Housing (Tenancies) (Scotland) Act 2016: Rent Pressure Zones

22nd January 2019

A paper for discussion by the council at the Care Learning and Housing committee on 24th January 2019 may be of interest to both landlords and tenants.

The first sections of the paper are reproduced here -

The Highland Council meeting in October 2017 agreed that the Council should examine the feasibility of applying for a Rent Pressure Zone for Inverness and anyother community in Highland facing similarly expensive rents.

The Care Learning and Housing Committee considered a report on 30 May 2018, and agreed:

 To continue dialogue with other Councils, COSLA, and Scottish Government

officers in developing a common approach to research and data collection that would support successful applications for Rent Pressure Zones; and

 That discussion take place locally with Ward Members, where requested, to discuss specific local issues of affordability in the Private Rented Sectors that might help in identifying specific locations in which to target evidence gathering in future.

1.3 It was also noted that it will take time and resources to develop the evidence base to support applications in Highland, and that there is no specific budget provision for this.

1.4 This report provides an update on both national discussion and local Member consultation, and makes recommendations of future action.

2. Recommendations

2.1 Members are invite to :

i. Agree that the Council continues to participate in joint discussion withCOSLA and other Councils considering Rent Pressure Zone applications;

ii. Agree to promoting the existing right of individual private rented tenants to challenge rent increases by requesting an independent assessment by Rent Officers; and

iii. Note that officers will monitor the emerging Planning (Scotland) Bill 2018 in

relation to potential changes to legislation for short term holiday lets, and will arrange discussion with local Members where there are likely to be

implications.

3. Background

3.1 The Private Housing (Tenancies) (Scotland) Act 2016 came into force in December

2017.

3.2 It includes provisions aimed at enhancing security for tenants by abolishing the Short Assured Tenancy, which allowed tenancies to be terminated at the end of the term without specific grounds.

3.3 The legislation creates the new ‘Private Rented Tenancy' (PRT). All new tenancies granted from December 2017 are ‘Private Rented Tenancies'. Existing Assured, Short Assured and other previous private sector tenancies will continue.

3.4 For Private Rented Tenancies, landlords will be unable to increase rents any more than once per year and will have to provide three months' notice when doing so. A tenant will also have the option to challenge a rent increase if they think it is unreasonable.

‘Appeals' against rent increases can be made to the Rent Officer who can then determine a ‘fair’ rent. The Rent Officer’s decision can also be subject to appeal to the First-tier Tribunal for Scotland (Housing and Property Chamber).

3.5 The new tenancy regime also allows a Council to apply to Scottish Ministers to designate ‘rent pressure zones’ (RPZ’s) which would cap rent increases (normally at the Retail Price index +1%) for any existing tenants in specific locations which they determine as having been subject to excessive rent increases in recent times.

4. Local Consultation

4.1 Discussion has taken place with Members in Badenoch and Strathspey, Nairn,

Lochaber, Inverness (Central Ward) and Caithness.

4.2 Members were able to consider the key features of Rent Pressure Zones in relation to local housing markets.

4.3 The key features are as follows:

 Rent Pressure Zones can only apply to a tenancy granted as a ‘Private Rented Tenancy’ (i.e. after 1 December 2017), and not to Assured / Short Assured or other previous legal private sector tenancy types; and

 The protection would only apply to rent increases for existing tenants who have a Private Rented Tenancy. They do not limit or control the level of rent charged for new tenancies or ‘relets’.

4.4 It was also noted that there is a formal application process seeking Ministerial approval for the designation of a Rent Pressure Zone. Applications need to provide:

 a profile of Private Rented Sector properties in the proposed area, including details such as house type, size, age, location etc.;

 details of the rental profile of any area and how this has changed and contributed to rent rises, including rent data to evidence a rent rise; and

 rent data specifically relating to existing tenants who have had a rent increase in

the same property. The rent data must be representative of the property profile

and must assess the impact of the rent rise on tenants.

4.5 All of this data and information must together provide clear evidence that:

 rents payable within the proposed Rent Pressure Zone are rising by too much;

and

 the rent rises within the proposed zone are causing ‘undue hardship’ to tenants;

and

 the local authority is coming under increasing pressure to provide housing or to subsidise the cost of housing as a consequence of the rent rises within the proposed zone.

4.6 A successful application for a Rent Pressure Zone would limit rent increases for existing tenants to the Consumer Price Index (CPI) + 1%.

4.7 Discussion confirmed that there are issues associated with access to and affordability of the private rented sector in Highland. These relate partly to the growth in the holiday let / Air B&B market and the impact that this has on the wider private rented sector.

There are related issues about affordability of private sector rents, particularly for lower income households, and a widening gap between even lower quartile rent levels and Local Housing Allowance (LHA) rates, which limit the help lower income households can receive for housing costs.

To read more see the full paper at Item 6 on the agenda at

https://www.highland.gov.uk/meetings/meeting/4074/care_learning_and_housing_committee_formerly_the_people_committee