Good morning and welcome to the fifth meeting in 2023 of the Local Government Housing and Planning Committee. I remind all members and witnesses to ensure that their devices are on silent and all other notifications are turned off during the meeting. The first item on our agenda today is to decide whether to take items 7 and 8 in private. Are members agreed? We're all agreed. Rwy'n cael y ddweud o agendaethau, a'r cyfnodau sydd o'r ddweud o'r Llyfrgelliaeth Cymru, Act 1982, o'r licenau o'r lluniau Lleithyddiaeth Cymru, Order 2023, o'r Lleithyddiaeth Cymru, Cabinet Secretary for Social Justice, Housing and Local Government. Ms Rumson yn ddod o'r lluniau Lleithyddiaeth Cymru, David Manderson, rhai o'r lluniau Lleithyddiaeth Cymru, Ministerial Policy, Craig McGuffey, rhai o'r lluniau Lleithyddiaeth Cymru. Rwy'n cael y clywbodaeth y clywbodaeth, mae'n ddod o'r lluniau Lleithyddiaeth Cymru a gafodd i rhywfodraeth i gael eu ddweud o'r lluniau Lleithyddiaeth Cymru. Lleithyddiaeth Cymru eitem mor hwnnw i'r licenau Lleithyddiaeth Cymru mwy o'r lluniau Lleithyddiaeth Cymru was approved by this Parliament in January 2022, and schemes opened in October 2022. Many hosts have now submitted an application for a licence, and I'd like to thank those who have already done so. The licensing scheme has introduced a set of basic safety standards, which will help to protect guests, hosts, neighbours and communities across Scotland. Where there are other problems such as noise, nuisance, littering, anti-social behaviour, the loss of residential housing stock and adverse impacts on communities, the licensing scheme and control area legislation together give local authorities the powers to address these. We recognise the cost of living crisis is placing significant pressures on businesses and individuals at this time. Therefore, we have responded and taken a pragmatic approach to help support hosts in recognition of these challenges. We are confident that this one-off six-month extension will give businesses more time to spread the cost of the licence fee and meet the scheme requirements. It will also assist those businesses who are facing difficulties in procuring contractors to carry out necessary work such as gas safety checks and energy performance assessments to obtain an energy performance certificate. Although the extension will give existing hosts more time to apply, I encourage those who have yet to do so to apply well in advance of the extended deadline to join the growing number of licence premises in the sector. We will continue to work with and listen to stakeholders as we work to refine guidance, taking into account feedback in the early months since the scheme launched. Some businesses have raised concern about certain aspects of the operation of the scheme. In responding, officials have worked closely with licensing authorities to raise these concerns and looked to find solutions to resolve them. This extension offers a pragmatic solution to genuine concerns raised by businesses during the cost of living crisis, but it recognises that we cannot unduly delay action to ensure that all short-term lets are safe and that local authorities have powers to tackle local issues. Therefore, I ask the committee to support the motion today. Thank you so much for outlining why you are proposing to delay the date by which existing hosts must apply for the short-term lets licence and also for reinforcing encouragement for short-term lets owners to continue the application process now, because I think that that is something that we need to get across to people that has not stopped continuing. I would be interested to hear, cabinet secretary, what reassurances you can offer residents living in short-term lets hotspots that this delay will not adversely affect their quality of life or wider neighbourhood amenity for another summer season? I recognise that and I recognise that we are mixed views about the short delay. I think that it is important to emphasise that we are not delaying the implementation of short-term licensing. Local authorities continue to receive applications from new and existing hosts. It is not a pause. I encourage hosts to keep applying throughout. What it is, is a recognition of some of the challenges for existing hosts. Therefore, it is a pragmatic solution to that. However, there is no rolling back of the scheme overall, because we believe that it is important in terms of not just the safety standards and making sure that everyone can have confidence in those basic standards being met, but that you are taking together as a package that local authorities have powers to address some of the concerns around antisocial behaviour and so on. I do not think that residents should have concern. Thank you for that response. I would be also interested to hear what your thoughts are. What you would say to short-term lets hosts who have already applied for the licence, which both you and myself are trying to encourage people to keep doing that, but they have invested to comply with licensing conditions and will now have to renew licenses six months earlier than other hosts who delayed applying. As I said in my opening remarks, many hosts have now already submitted an application for a licence, and I thank those who have already done so. The core component of the scheme is a set of mandatory safety standards. Many hosts will be meeting those standards already, and therefore incurring associated costs is a matter of best practice or compliance with existing law. They would have had to have done so. Existing hosts that are yet to apply are encouraged to apply for a licence well in advance of the deadline. I want to re-emphasise that. Those who have already applied for a licence have already met the costs of doing so. Others will now need to do so. I go back to my original comments in my opening remarks. It is a pragmatic solution to respond to genuine concerns raised by businesses during the cost of living crisis, and I think that it is a balanced response to that. Thank you for your response to that. I am now going to bring in Marie McNair with some questions. Thank you. Good morning Cabinet Secretary and the rest of the panel. Concerns have been expressed as you know about the delay, particularly from local authorities who have recruited licence staff on the basis of the original deadlines. Local authorities have told us that the proposed delay may create financial and staffing problems. How does the Scottish Government intend to support local authorities to deal with such issues? I recognise that some local authorities will have put in place additional staffing. Our guidance encourages licences and authorities to take steps to publicise their licences and schemes to raise awareness among current and potential short-term let-hosts and operators. We would encourage those licencing authorities through their staffing to take active steps to continue raising awareness so that the work does not stop and continues. We are doing so to encourage hosts to apply well in advance of the deadline, and we want to help them to emphasise that message. We are about to run the second phase of our digital marketing campaign, reminding hosts of the scheme requirements. That may spark people to apply. We will also use an opportunity to encourage hosts to apply well in advance of the extended deadline. That will help to support licencing authorities to spread the load of applications, because we do not want them all to come in just before the extended deadline. The licensing scheme also operates on a cost-recovery basis, so we anticipate that licencing authorities will consider any impact of the extension when they come to review licence fees, but there has to be a balance there, because we want licence fees to be kept to a minimum and only for cost recovery. Finally, we will remain engaged with local authority partners during implementation to identify other areas that can help to streamline the process to benefit both operators and licencing authorities. We want it to be simple, straightforward, not onerous and digitally provided where possible. Can you provide some more detail on how the Scottish Government intends to monitor and review the impact of the short-term licencing regime, with particular focus on the residential mentee, housing markets and the tourist economy? We previously committed to work with local authorities to review levels of short-term liability in hotspot areas this summer. However, the extension to the deadline for existing hosts to apply for a licence means that we will need to reconsider the timings of the review. I will update the committee on the timings and the scope of the review in due course, if that would be helpful. However, we are not waiting for the licence review before any action was taken, so we have already demonstrated that it has been responsive to concerns that have been raised by businesses by engaging with licencing authorities to discuss areas of concerns such as floor plan requirements, where there was a discussion to make clear that some of the onerous requirements were not actually required. That shows that we have really tried to support a sensible outcome to those discussions. We will continue to work with stakeholders to monitor the on-going implementation of the scheme and respond to facility common processes where possible to do so and to help to learn from best practice and spread that across areas through guidance. Good morning, cabinet secretary. Good morning to officials. Thank you for joining us this morning. Why has the Scottish Government only put forward a six-month extension, not a year, given that this is to cover the situation here in Edinburgh over the festival period? Well, I think that it was really to do more than that, actually. It was a recognition of the cost of living pressures that are impacting on businesses at this current time. I think that the six-month extension is a balance and pragmatic time frame. Clearly, you could argue how long is the cost of living crisis going to last, but we felt that having a six-month extension would allow one of the busiest periods of time over the summer to be covered by hosts to have that period of time to help them with the costs of applying for the licence. It would be one of their busiest times. It is a one-off six-month extension. We do not want to go beyond that because we think that that would be disproportionate. However, we are also working with licensed authorities to make sure that we support them to iron out any difficulties that hosts are raising around specific concerns that are referred to the floor plan issue earlier on. We think that that is a proportionate and balanced approach. The committee has heard evidence and calls from organisations like Edinburgh, Festivals Edinburgh, for home sharing and for home letting to be fully exempt from the legislation and the licensing scheme, especially around supporting major events. You have touched upon this being a health and safety piece of legislation at heart. Can I ask what your view is on that and whether that is something that is part of the review that the Government will consider? I think that it is requiring hosts to apply for temporary exceptions and give licensing authorities the ability to have temporary licenses up to six weeks. That is the right approach to take. In terms of home sharers, we have set out in guidance the parameters that licensing authorities should consider, for example, when setting fees to make sure that that distinguishes between home sharers in terms of that being at the lower end of the scale and recognition that that is quite different from a whole property let. I think that that, taken together with the temporary licence for up to six weeks being available, should help to ensure, for example, the Edinburgh festival, that those who let out a room in their home or a flat for that part of the year for that purpose and nothing else, that those temporary licences will be able to cover that. In terms of the legislation being delivered and applied, would it not make sense for those individuals then to not be currently part of this and actually maybe a future phase so that Edinburgh City Council, for example, of only processed 40 applications to date? That is where there is a real concern from the festivals that this six-month period is not necessarily going to meet the demand that is coming if these applications are not necessarily even made for a next year's festival. In terms of Government thinking where it makes sense almost for people who are, for health and safety reasons, are going to be in that property as well for all those reasons to not necessarily be part of the legislation and why this six-month extension and reopening up of the legislation at this stage could not have looked at that in more detail. I might be bringing officials in on the detail because I know they have been speaking to Edinburgh in quite some detail directly. We have listened very much to the Edinburgh festivals organisations and some of their concerns that they have raised. We think that the extension, along with some of the discussions that have happened around making it less onerous and straightforward, will not adversely impact, but we will, I think, want to take stock of the situation for this year and in time for summer of next year. David, I do not know if you want to say a little bit more on that. The position at Edinburgh, I think, at the minute is that existing hosts, there will be a number of people who have operated throughout the festival for a number of years. The reality is that, this year, during the extension, if approved, the position would be that there would be smaller numbers of people applying for temporary exemptions. That would then give the festivals, organisations, the council and the Scottish Government the opportunity to work together and look at how the process has worked with lower numbers of applications ahead of a larger influx in 2024. The other thing to say is that, with exemptions, it is important that they are applied for, because that gives the licensing authority some form of oversight. In cases where there have been issues one year during the festival where an exemption has been granted for a premises, it could be the case that the next year, the licensing authority looks to either refuse that application or grant it with conditions to help manage those concerns. Thank you for that. I think that it is an issue that we maybe will need to return to, because, from conversations that I have had with the council, people operating before September are now being told that they do not need to apply until after the festival. If this is just a one-off they do, I doubt that they will do it until next year, and then the council will face that potential tsunami of applications then. I do not think that it is necessarily going to fix the problem now and build it up for later. I wanted to move on to a point that you have already touched upon, Cabinet Secretary, with regard to licensing schemes being applied inconsistently across Scotland, and specifically with regard to the floor plans. Just wondered where you have provided guidance to councils now that the detailed architect floor plan is not needed, and a hand drawing one? What actually is the guidance being given now to councils on what is expected? Yes. This is an issue that has been raised. We have received reassurances from licensing authorities that they are taking pragmatic approaches to floor plans, including, for example, accepting hand-drawn plans that show sufficient detail, offering to pre-check drawings before an application is submitted and providing examples of acceptable plans, accepting annotated versions of existing plans that hosts may have, rather than hosts feeling that they need to go and get a set of architect drawings, for example. Through discussing those issues, that is now clear, and licensing authorities have been communicating with hosts to make that very clear about what the expectations are. The reason for having floor plans of some description, of course, is important in terms of making sure that, for example, the Scottish Fire and Rescue Service is able to identify where there might be an issue with fire escape locations so that that could be addressed. There is a purpose to having the floor plans, even in a basic form, around maximum occupancy levels. However, the method of the floor plan and what that consists of needs to be pragmatic, and we have reached a much more reasonable pragmatic place with that. I think that it is something that, from looking at different council websites—maybe to monitor going forward, because the description of what is being put out there seems quite varied. I take your point in terms of fire exits and signposting of those, but councils are sometimes still advertising very much different details on different websites, given that there are 32 variations to that now being applied. We will monitor that. It comes back to the point about learning some of the best practice and trying to get that shared across the 32. We have tried where issues have been raised—that one, in particular, being a key one—to work with licensed authorities to be sensible about it. I am now going to bring in Willie Coffey with some questions. We also heard in evidence that some of the local authorities are applying conditions to the licences that are outwith the scope of the legislation. A couple of examples were provided to cover issues such as garden play equipment and swimming pools. Is the Government aware of that? Is that competent within the legislation for local authorities to apply those additional conditions? Obviously, there are mandatory requirements. Licensing authorities have discretion to impose additional conditions to respond to local needs and concerns. Those additional conditions might apply to everyone in that licensing authority area or it might be specific to certain types of property, tenements, for example, or by case basis. Additional conditions can help licensing authorities to respond to local challenges and concerns specific to certain models of short-term letting, for example, such as the tenement flats that other people have to consider. The Civic Government Scotland Act gives licensing authorities powers to impose conditions, which should be reasonable conditions, as the licensing authority think fits. There is quite a wide power there. In guidance, we have tried to set out some of the issues that licensing authorities may wish to address through the use of additional conditions. We have set out things such as noise and nuisance, litter or other mess in communal areas, failure to maintain or contribute to the cost of communal area repairs and increased wear and tear. The guidance suggests that we template additional conditions in relation to anti-social behaviour, privacy, security, noise, littering and waste disposal, damage to property. Some licensing authorities removed or amended additional conditions following consultations on their draft licensing policies, so they have obviously taken into account the feedback from communities on those. What I would say is where hosts have concerns about specific additional conditions that they feel are onerous or go beyond the intention, we would encourage them to discuss those directly with the relevant licensing authority. That local flexibility is extensive, but we urge that there should be a relationship to the licensing to the guidance. I have set out those areas that we had anticipated those additional conditions being focusing on. Your view clearly, cabinet secretary, is that those matters are all within a broad competence framework for the whole legislation and associated legislation to deal with the issues that you have mentioned that have came up at the committee several times. Thanks very much for that. Another question that I have is about the application process itself. We are hearing that it is a wee bit complex, particularly on-line, of the application process, the on-line mechanism that people are engaging with. Are you aware of that and are there any plans to help to simplify that so that we can encourage more people to get through the process quickly and efficiently? In guidance, we set out that we would like hosts and operators to be able to conduct as many transactions as possible in an on-line or electronic format. Most licensing authorities have put in place on-line application systems for short-term licensing. They are of course of benefits to licensing authorities from having clear and easy-to-use application methods. It helps to reduce the volume of queries from prospective applicants if the process and guidance is clear and the application is straightforward. Guidance also sets out that licensing authorities are expected to still have paper copies of relevant information and indeed the application form available upon request for a small number of people who cannot access them online. I would expect, given that this is a new scheme, that we would expect licensing authorities to look to refine their processes over time in the light of feedback from hosts. When we do the wider review, that would be one of the areas of making sure that the best practice that there is with feedback from hosts about what they found easiest to use is encouraged. I do not think that there is anything to be gained by having overly complex systems. We have not required it and we have tried to set out the guidance that we would actually want those to be as simple and straightforward as possible and is much digitally based. Does the delay, do you think, give us the chance to pinpoint, identify good online processes and perhaps encourage authorities to adopt what seem to be more resilient and streamline the application processes? I would say so. As I said an answer earlier on, we are not waiting for the official review to get on with sharing best practice and encouraging as simple a process as possible. We are doing that and sharing best practice and encouraging that to happen now. Thank you very much for that, cabinet secretary. I am not going to bring in Miles Griffin, who is joining us online. Just for the purpose of that item and a number of other items on the agenda, just to clear an interest as the owner of a private rented property in North Lanarkshire Council area. We have heard evidence, as a committee from a number of local authorities, public sector partners, particularly Scottish Fire and Rescue Service and Police Scotland, that they do not have the resources available to process licence applications as fast as they would like to, and that they do not get additional resources to support that process. Cabinet secretary, have you seen the evidence that those public sector partners have provided and, if the Government are taking any action to resolve any of the issues that they are flagging? I am aware of that evidence. During this year, the Scottish Fire and Rescue Service developed a fire safety checklist for licensing authorities and applicants to complete, which helps the service to really effectively target their resources using a risk-based approach. I think that that is absolutely the right thing to do. Police Scotland is now assisting licensing authorities to complete fit and proper person checks as part of the process undertaken by licensing authorities. Although resourcing is a matter for Police Scotland and SFRS to consider, it has been planning that for some time, and we remain engaged to support this element of the scheme. As I said earlier, licensing schemes are administered on a cost recovery basis through the collection of application fees, and we would expect all those costs to be covered. I think that we would keep this under review. If Police Scotland and SFRS have problems with it this morning, to raise this formally, clearly we would look at that, but I would anticipate that, given the lead-in time for the scheme, it will be doing that as part of the on-going work that it does on a number of schemes. We will keep that under review. My second question was on consistency. We heard that some local authorities in Glasgow included are asking for the planning status of a short-term let to be set out in the licence application, even when the property is outside of a short-term let control area. Just ask the cabinet secretary's view on that requirement when it comes to the licence application. A licence authority can refuse to consider a licensing application if it considers that the use of the premises would breach planning control. Guidance for hosts sets out that they are advised to check their local authorities' planning policies to find out if they need to obtain planning permission before applying for a licence. Out with control areas, it will continue to be the case that a material change of use will require planning permission. It is a matter for the relevant planning authority to determine on an individual case by case basis whether or not that proposed use is material. It is the responsibility of hosts to ensure that they comply with any relevant legal requirements, including any required planning permission. The question was specifically about Glasgow. Planning authorities can, of course, adopt blanket policies on short-term lets within their local development plans. As I understand it, Glasgow has, since 2017, adopted a policy within its LDP of refusing to grant planning permission for a change of use from a residential flat to short-stay accommodation within existing blocks of residential flats. I am assuming that is for all the reasons that we understand about potential neighbourhood disruption and so on. Those powers do already exist, and that is, hopefully, helpful clarification. Before we move on to the next item, I want to note that we received apologies from committee member Paul McClellan, who is not able to join us today. We now turn to agenda item 3, which is consideration of the motion on the instrument. I invite the cabinet secretary to move motion S6M-07566 that the local government housing and planning committee recommends that the Civic Government Scotland Act 1982, licensing of short-term lets amendment order 2023, be approved. Thank you, convener. Although I am happy to support today's extension, I would put on record that I am concerned that many of the issues that have been highlighted do not feel like they have been properly taken on board. This opportunity to try to look again at how this can be applied across councils has been missed. I sadly think that we will be back here in the autumn. My own council here in Edinburgh certainly does not seem to be in a space where this will be delivered. Although I welcome this extension, I do not think that six months is enough or taking on board some of the potential opportunities to change the legislation. We will be supporting it today, but just to put that on record. I would like to put on record that I will support the extension. I think that what swayed me in that direction is Scottish Fire and Rescue Service and Police Scotland's statements that will give them the time to do the work that they need to do. However, I want to highlight the fact that we are bringing in the legislation to take care of the residents who are living in short-term hot spots. We must make sure that we are not back here in October looking at another extension. The other thing that gave me great concern and evidence from last week was the fact that we heard from Highland Council, but I am aware of other local authorities who have put the scheme in place, who have hired their legal team and other staff. They have used the budget for this time when they were expecting a deluge. Highland Council is one of the local authorities that we are most aware of in terms of short-term lets. They have used up that budget now. I understand that we can absolutely promote the process and advertise it, but we all know that deadlines really work, because that is when people finally do it. I want to make sure that we are not going to keep moving that goalpost and just be mindful for the local authorities who did do the work. The question is that motion S6M-07566, in the name of Shona Robison, be approved. Are we all agreed? We are all agreed. The committee will publish a report setting out its recommendations on the instrument in the coming days. Thank you very much for joining us this morning. I now suspend the meeting to allow for a change of witnesses. The next item on our agenda today is to take evidence from three panels of witnesses on the cost of living tenant protection Scotland Act 2022, amendment of expiry dates and rent cap modification regulations 2023, and the cost of living tenant protection Scotland Act early expiry and suspension of provisions regulation 2023. We are joined on our first panel of witnesses by Timothy Douglas, who is the head of policy and campaigns at Property Mark, Sarah Jane Lang, who is the chief executive of Scotland, land and estates, and David Mehulish, who is a director at Scottish Property Federation. I welcome our witnesses to the meeting. We have quite a few questions for you, and we will try to direct them to specific witnesses where possible. However, if you would like to come in, please indicate those to the clerks. I would like to begin by asking—I think that I will direct this to David initially—what impacts has the current rent freeze had on tenants and private landlords? For example, has the supply of private rented accommodation changed, and are there any different geographical effects? Good morning, convener, and thank you very much for that introduction and question. From our side of things, we are very much focusing at the SPF on future supply, very much on the future investment piece. A lot of our membership is interest in this area is what we call built rent, so brand new bespoke buildings designed specifically for rental purposes and now expanding across the UK into what is called single family renting, so houses for rent, as opposed to flats apartments for one for better description. Initially, from that perspective, investors and landlords, there was a very sudden pause in activity, or even retreats from activity in terms of the new build supply. At the same time, and I suppose this is very much a moment in time, a wider membership does involve advisers who let properties in the wider PRS, and I think probably the standout stat to me on that is when we picked up, I think it was from Savals who suggested there were 29% fewer properties available for letting now than in 2016. Now, that might be, and it could be that Tim comes up on this later on, but it could be, I think there was initially some evidence of landlords looking to sell and move out of the sector. Against that, there'll be some reports, obviously new entrants coming in, but I think the point is we're now starting to see slightly longer tenures in terms of tenants staying in the home longer, so therefore you need to increase supply to keep up with availability of let properties, so I think the evidence is that there has been a reduction in the availability of properties for letting, yes. Thanks very much. Anybody else like to come in on that, but if you're okay? Sarah? Thank you, convener, and obviously Scottish Land and States represent the rural private rented sector, and our members currently provide homes for more than 13,000 households across Scotland, and if I can split the impact into two areas, one is on the current supply and the other one is on the new supply and in particular supply of affordable rented housing. So impact on the current supply, what we're seeing is a reduction in planned investment in the properties, so of course one thing that landlords need to be able to do is to reinvest the rental income into planned investment, planned improvements, and we're definitely seeing plans for that changing. We had members who had significant capital investment programmes planned on energy efficiency and other improvements in the next few years, but who have had to put that on hold until they get some certainty. The other one is about, I suppose, the specific impact of this legislation, but also the wider impact of retrospective changes on tenancy law. We're seeing people who tenants, landlords who are always willing to take a chance on young people and other vulnerable members of society looking for private rented housing in rural Scotland, but they are now thinking, I need to de-risk this because if I don't know with certainty that I can either get the property back or I don't know what my long-term rental income is, they are de-risking, so they're moving to a situation where they're either leaving properties empty or we're seeing young people not being given the same opportunities in the past, and that's understandable. We're also seeing some landlords starting to look at their stock and they plan to sell that off at change of tenancy. Evidence that we have to date shows that quite a lot of this will leave the private rented sector. In fact, it will leave the local housing market because many of them will be sold as second homes and holiday homes. Probably as important is the impact on new supply. Our members are working with RSLs, they're working with Housing Trust, they're developing affordable rented homes themselves through Scottish Government grants. We've actually seen a halt on that from members, so we're really unnerved by the uncertainty. If they enter into a new long-term grant agreement to deliver affordable housing, as members did last year, suddenly the terms of that contract will be changed by the Scottish Government. That means uncertainty for funders, but what's really disappointing is that we've seen drying up of interest in the provision of much-needed affordable rented homes in rural areas. Thank you, Sarah-Jay. Timothy? Thank you again for the invitation to attend today. Property Mark is a membership body for letting agents. We've got over 500 members in Scotland and I think definitely the legislation continues to have an effect on landlord confidence. The majority of agents who reported back to us are still seeing landlords exiting the market. From our survey data between November and December, when the legislation first came in, 85% of members were reporting that landlords have expressed a wish to sell their property. That has increased to 89% in January and February. Agents have already seen an increase in notices to sell due to the temporary measures. That was 68% in November and December, and that has increased to 78% in January and February. Basically, have you seen an increase in landlords selling property when a tenancy naturally comes to an end in January and February? That sat at 92% of our agents reporting that. I think the crux of the housing problem is that demand is far outstripping supply. I think you touched on geographical locations and just information from an agent that owns sales, manages 1,800 properties across Scotland. They've recently advertised in Glasgow. They've received 100 requests a view within three hours of it going live. An agent in Aberdeenshire property on the market for one day and received 30 requests from families to view it. So, demand is very much there. I think the final point would be, which I think the committee would probably come on to, is behavioural change. Actually, what our agents and members are reporting that rent increase has never really been a significant factor in, to some extent yet, the legislation and the threat of further rent controls and the continuation of legislation is inciting landlords to put up rents between tenancies and, as Sarah Jane alluded to, to cover any and future costs. Thank you very much. You actually preempted my next question, which was to ask if there's any evidence of behavioural change in private landlords as a result of the legislation. Sarah Jane, have you got any evidence among your landlords who are providing the 13,000 homes? I touched on one, which is the de-risking at the letting stage. So, that's definitely something that we're seeing for members, but also not bringing new properties into supply. I think that the other thing that we're definitely hearing from members, it's about the conversations that are happening between landlords and tenants. There are some of those, which have been really good strong relationships for years, because, of course, there's a history of longer length of tenancy in the rural sector. The messaging around the legislation has meant that there's been more conflicts between landlords and tenants, so landlords are having to counter some of the simple messaging about rent-free eviction ban and explain the nuanced impact, because, of course, that's not actually what we have. So, sometimes we're definitely seeing an awful lot more intervention required from landlords to explain what that legislation actually means for tenants, because we do have tenants who have stopped paying their rent, and they'll say things like, there's nothing you can do, you can't affect me. So, that's a tenant behavioural change, but landlords are having to pre-empt that and provide advice and support. Thanks for that. You mentioned that among your landlords they tend to have a longer tenancy, but is there any indication that landlords are increasing rents between tenancies more than they might have otherwise done? Not so much from the survey of our members. We also had a number of members who voluntarily froze rents during Covid, so some of them were just looking for a modest catch-up. The private rented sector isn't a homogenous sector, so within our sector, especially in Scotland and the States, we'll have everything from large detached properties in Aberdeenshire, which are rented to a mobile oil and gas workforce, to affordable housing in local villages, which families have lived in for 15 years. It's a very different market, but I'm not seeing anything coming back from members on rental figures that lead me to believe that they're jumping in at tenancy change to hike up rents. There's no evidence from my members of that happening. Thank you for that. Timothy, do you want to come back in on... Yeah, thank you. I think just building what's said in the opening, definitely mortgage costs are playing a factor. Just look at my notes here. An agent in Inverness, they've got one landlord in between tenancies and a fixed-term mortgage due to ending 15 months, but she has increased rent now in expectation of impending rise in 15 months. She doesn't need or want the additional rent now, but she is afraid she won't be able to ask for it next year when she does need it. The tenant is therefore paying an extra £35 a month from now instead of in 15 months time. So actually, the legislation is pushing up rents, or at least making landlords who weren't previously thinking about rent, as Sarah-Janes alluded to, worked hard during the pandemic, working with agents to keep rents no increases, are actually now having to look at that. Another agent from Lanarkshire, they've got 250 managed properties. Most landlords appreciate the issues around cost of living. However, one landlord has an increase in mortgage payments from £151 to £560. So even a 6% doesn't even dent the additional costs. So it's definitely playing a factor. But I think more broadly, from our survey data from Scottish members as a whole, in November and December, we asked them, or they told us, 83% of agents said that landlords would be inclined to increase rents between tenancies because of the actor cover impending and rising costs. When we asked them again in January and into February, that rose to 94%. So it's definitely having a factor. Thank you very much for your responses. David, do you want to come in or we can move on to other questions? Just to add, I think in terms of behavioural change in that, it's anecdotal, but some of our members are those who invest or finance RSLs or mid-market rent as well and so on. I think there was some evidence of non-payment and the feedback that some tenants realised. Obviously, there was a moratorium and I think that did factor in some of the initial feedback after the legislation late last year to report that. But I think as well, yes, the agents we have in members do report those increasing pressures on tenants. I think there is a traditional difference between changes to rents for existing tenancies or even tenancies that will be rolled over the same tenant and those tenancies that are lettings that are new to the market, where it's more a product of demand and supply. Tim's well described the huge imbalance between demand and supply. I mean some of our agent members were reporting over 600 eligible applicants for one property recently. That's a signal of just how imbalanced that supply-demand ratio is, but I think there's been a big difference and I think the data suggests a very big difference in rental increase, average percentage increases as well. Thank you very much for that response. I'm going to move on to questions from Willie Coffey. I just wanted to ask you about the rent cap and to get your views and whether you think it's a proportionate measure that the Scottish Government is proposing here and probably just wrap my next question into that. Depending on your response to that, what do you think of the 3 per cent and the 6 per cent that's being proposed as are they reasonable and balanced in all circumstances given the cost of living crisis that we're in and does it give some kind of support to private landlords that might be experiencing difficulties, as we've heard already? First of all, what are your views and whether it's a proportionate measure and then maybe your views on the 3 per cent and the 6 per cent that's being proposed? Maybe start with Sarah Jane, thank you. I think it's a really good question. I think one of the things that we struggle with is because there is no methodology behind how the Government has arrived at the 3 per cent. It's very difficult to see whether it's a proportionate response because I'll be honest, it does feel like it's a figure that's been plucked out of thin air. For us, I think it's back to fairness and it's back to looking at the sectors a whole. If you're going to afford that well-paid executive living in a detached house in Aberdeenshire, more protection than a social rented tenant, then it doesn't feel as though there's fairness across the whole sector. It's really difficult to see how they've arrived at that 3 per cent. For us, the question of fairness and proportionality is a really fundamental concern. I don't think it has been proportionate. I think the real issue here is we're simply not supplying enough new homes for rent across all 10 years, whether it's a social mint market affordable or just outright market. The point on data and the evidence upon which this is based has been a point of frustration. Without specifying some of the engagements we've all been in, I think the frustration on the lack of data evidence on what happens to exist in tenancies rental increases is actually shared by the Government to a degree. That does lead us to question the basis of evidence on which decisions have been made. To our mind, looking at Scottish housing reviews, even towards the end of last year, with increased mortgage costs, increased energy costs and so on, the suggestion from the Government was still a 4.4 per cent increase for existing tenancies. The data was not perfect in that the housing review makes that very clear, but that's obviously very different to what you might see publicised in terms of, over the last 10 years or so, increases of 40 per cent, whatever, in hotspots like Edinburgh and so on. I think there's a massive difference, but obviously what these regulations refer to are existing tenancy rental increases, and I think that's been a point of frustration for us. The 3 per cent move, I would say, it's at least got some of those members of ours who are talking to investors to try them to bring in new homes to Scotland across all 10 years, by the way, mid-market as well as outright rent. I think that's a step in the right direction from our perspective, but I think 3 per cent is still highly constrained. I think there'd probably be a bit more positivity if it was closer to five, if I'm not honest, but we welcome the step from the Government that it's not absolutely zero, and it seems to have got some discussions going again with the crucial investor market that we're going to need if we're going to bring forward the volume of homes we do need in this rented sector. Okay, thanks, David. Timothy? Thank you. Well, I think it's been well-publicised. I don't think the legislation as a whole is proportionate. I think, as David has alluded to, members will welcome a raising of the cap, but it's simply not enough. To reiterate a previous point, agents and landlords weren't increasing rents during the pandemic. They worked really hard to sustain tenancies, and, as one agent said to me, there was no forewarning of this legislation in September that was sprung on them. I think there is a frustration that there's an assumption that all landlords are wealthy and every tenant needs support, and that simply hasn't been factored in. I think the other issue, dare I say it, and it's been mentioned before, rent pressure zones exist, but they've not been used. So, if there was an issue or is an issue, why haven't they been used? And simply, as we said in the opening, all it has done is cause uncertainty for landlords and many selling or looking to sell. I think another frustration from Procter Mart and the sector is that I think the government have focused a lot on recognising the costs to the social rent sector. It's been very little mention of the costs and fixed costs to landlords and those increasing costs, as I talked about through mortgage, for example. But I think just on the decision to continue and the rise to 3%, I'll give you some of our survey data again and from January, February this year, 92% of agents said no when asked, do you think the rent cap rides 3% is enough to cover increasing landlord costs? Have any of your landlords applied for an exemption to increase their rents above the cap? 70% said yes, but finally, have they been successful? 17% said no, 83% said they didn't know. So, there seems to be knowledge out there about the change, but it's having an impact, definitely. Did you ask what percentage they thought would be fair and reasonable? No, but that's maybe something. What do you think? He said five might be reasonable. I think, as I said in the opening, Procter Mart members think that the legislation as a whole is not proportionate to the problem and to where the market was at when the legislation was brought in, and therefore what would be proportionate is to remove it altogether. Thanks for that, Thomas. We're now going to move on to a different topic, and I'm going to invite Mark Griffin to come in and ask some questions. Thanks, Cymru. If I can direct my first question to Timothy and then for anybody else who wants to come in. My line of questions was just around the evictions moratorium, but just to broadly ask, Cymru, what impact do you think the moratorium on enforcement of some eviction orders has had on both your tenants and on landlords? To be honest, I think this is one area where it's probably been difficult to say, if I'm honest, really. When speaking to agents around the general impact, I think on the whole and evictions, what we're hearing is landlords are taking the opportunity to exit where they can. Now, obviously, the key issue that's come back to us is the substantive rent arrears when rent arrears go beyond six months, but then you're into long-term territory and what happens if the tenant doesn't have the rent and cannot pay in the end. So, as I say, most of the feedback we've got back from agents is that it's landlord notices to sell, and that's what we're seeing. Thanks. Anybody else want to come in on that? No. For SLE members, what we're hearing is an increase in rent arrears, and so quite a lot of the advice work that we're having to give to members is about the steps that they can take, because obviously, we've had changes in terms of how those rent arrears cases are handled. I think that we're still at that stage where we're only just starting to see the impact, and the Scottish Government's recent report. We're starting to see some trends, but we're still probably a few months away from knowing just what the long-term impact of that is, because, as I said earlier, we've got some members who are still carrying the rent arrears from Covid as well. I feel, certainly from anecdotal evidence from our members, that there's definitely a growing number of rent arrears cases about to come into the system, where landlords have been trying to manage those as carefully as they can, but cannot continue to carry the scale of the rent arrears that are currently in place. Secondly, to ask all three members of the panel if you feel that the evictions moratorium, whether it's proportionate and necessary for that to continue as proposed by the Scottish Government, and perhaps come to David first? Well, I think the only evidence we've had on the impact of the moratorium was as referred to earlier, and I think that kind of came from those fundants and investors in the RSL sector. I think the process, there was already very strong protections and we felt there was a balance in the pre-existing legislation. So, on that basis, we wouldn't say we felt it was proportionate at this stage, because I think it was a very blunt instrument, as was the related rent cap, and we do feel that that has disrupted what we thought was a balance of interest between landlords and tenants that have been secured after the Parliament voted through the 2016 legislation. So, on that basis, we feel it's disrupted and that balance between landlords and tenants, so no, we don't think it was proportionate at this stage. I don't think the evidence, there may be a lot that's stored up, as Sarah Jones referred to, because obviously we are right after Covid and the period of time there, but I'm not convinced that the evidence was right there at that time for the measures on the eviction moratorium. We think that it was a very blunt instrument. Sarah-Jane? Yeah. So, I think, you know, if we look at the changes that came in after Covid, the continuation of the emergency measures in relation to the move from mandatory to discretionary grounds, so, you know, evictions having to be referred to the first-year tribunal and also the introduction of the pre-eviction protocols, which this committee looked at, I think he already had a move to have significant safeguards in place. And as David said, there didn't seem to be any evidence for the need to introduce the moratorium on evictions last September. I think looking at the figures there, that's still the case. So, no, I don't believe it was a proportionate response, given the very recent changes to the tenancy protection that were put in place last year. Thanks. And Timothy? Yeah, thank you. I totally agree with what David and Sarah-Jane have said. I think, as has been said previously, there's no doubt from our agents that it's frustration, it feels like deja vu, all over again after the Covid being told that they were temporary and then extended. So, you know, there is a wider knock-on impact, I think, in terms of agents and landlords not necessarily knowing where they stand fully with the Scottish Government, which plays into that uncertainty around more landlords questioning their portfolios, questioning the rent levels. But I think the key question when it comes to evictions and the moratorium that should be asked at the Scottish Government is their engagement with lenders and what's their appetite and how are they responding to continued moratoriums, particularly when, if there are increases in instances of mortgage default. Thanks for that. Mark, do you have any more questions? No, no more questions. Okay, we're now going to move on to questions from Miles Briggs. Thank you, convener. Good morning to the panel. Thank you for joining us this morning. I wanted to ask a question with regard to private tenancies and the potential to support people furthest removed from the housing market into a tenancy. You've outlined quite comprehensively what you see as a change in landlord behaviour. We now have a record number of people living in temporary accommodation in Scotland. Do you think that that is a direct result of this and people furthest removed not being able to access private tenancies and what that impacts likely to be in rural Scotland I think is more pronounced given a lot of one property having a huge impact. So, Sarah, I'll maybe bring you in for that rural dimension of this as well. Yeah, absolutely. And I think as I alluded to earlier, I think the rural, private rented sector is a very diverse sector and one of the really important roles that plays is almost like a pseudo rural registered social landlord in many of our areas where they're providing affordable rented housing for people who are looking for either temporary accommodation or slightly longer term accommodation but who have no history of letting. So the vulnerable in society who are looking to set up home or who perhaps needed to stay in a certain area. The reality is that if you are a landlord, you might think twice. Someone doesn't have a history of being able to pay their rent if they don't have a history of good behaviour and tenancy. When you know no references, would you take that risk knowing that it might be very difficult to take any action and you might be left with 18 months of renter years. I think many of Scottish Land and Estates members see themselves with that social commitment to looking at who is sending their children to local school, how it's impacting on the community dynamic. So they were always willing to take a risk. That has definitely reduced and thinking about housing options. The more you limit the housing options, the more we're going to lose young people from our rural areas and that's certainly a real concern for us. I think the other thing is that back to that new supply. The current supply is de-risking that but we're really really concerned about what we're hearing from members who are putting the new affordable housing developments on hold at present because that's the much needed supply we need to see right across Scotland. David, Timothy. Thank you. We don't have anything specifically on rural but I think just as an observation, in the last 12 months more and more of our agents report landlords using rent guarantee schemes, rent guarantee insurance and obviously those policies tend to be added on to the landlord policy but I think the observation that I'm keen to make is that even from a large insurance provider, you go onto their website, you type in rent guarantee insurance and straight away it says since 6 September and the cost of living legislation under our terms and conditions rent guarantee insurance basically it says that they've now changed their policies in light of the legislation and won't cover the rent due to the cost of living legislation so I think you know that's very much an industry insight but that again will have a knock-on effect with those people that Sarah James referring to trying to access the market perhaps who are perceived at higher risk to landlords and agents. Thank you for that. Looking around the world and just looking across to Ireland for example where they've had ahead of us this sort of intervention and legislation in place they've now seen a record low in number of properties available to rent both urban and rural and they're seeing some of the biggest rent increases so it's not had the desired impact which the Government in Ireland had. Do you think Scotland will buck that trend? It's very difficult to say which country is is different. You can't necessarily talk even in even in Scotland across the UK of one housing market it's made up of lots of different markets if that makes sense so I think we would use that to caution to the Scottish Government about the impending impacts and I think also closer to home as part of the Private Tenancies Act in Northern Ireland which was recently passed you know they've decided to restrict the frequency of rent increases to once every 12 months but within that legislation they did a trigger for a review into further rent control or other fair rent measures and that review came back in the autumn last year saying no further measures you know are needed so but I think finally it's not necessarily from our point of view the impact of this you know this sort of rent cap rent control fair rents it's not a new issue you know when we surveyed our members back in November 2019 73% said it would lead to higher rents at start of the tenancy 65% it would be a lack of incentive to maintain property 73% reduced portfolio size 83% would leave the sector and we're three four years on and what we're seeing that's exactly what we've just said this morning I don't think Scotland would be different from some of the wider experiences and I think you've seen you've mentioned Ireland some of the concerns there I think there's been similar concerns with a rent control policy in other jurisdictions Berlin Sweden some of the American states and so on and about the consequences for supply and then the longer term impacts actually on on high rental increases for properties coming onto the market so I don't think Scotland would be exempt from that from that scenario and I do think it does come back to getting that that new supply into the market to try and meet this this huge demand I think the the government may well point to the fact that the rent control policies and in in other parts of the world but I think you have to be careful because that's a longer held system that's in place they've had longer term investors in place for some time and I suppose the concern for us at this point was we'd only just started to attract that kind of longer term institutional investor landlord back into this market so your your pension funds so the people who take a long term perspective on on major investments and I think the perception of Scotland has taken a dent in terms of investment in this in fact it definitely has done from the responses we've had and that would be our concern I think longer term I think the you know the PRS if we can have certainty I think certainty was mentioned by Tim earlier that is so crucial even the last week there's been agents saying they're trying to advise funds on potential investments in Scotland but they just don't know where policy is going to lie or how they can best advise on things like where mid-market rents will go, where the BRMA will go in the future and so on so and and these when you're building new trying to bring new supply in you're looking four or five years ahead so decisions made now are really going to crystallise in four or five years once you think on through planning on through all the investor criteria committees and so on so I do think that's something we need to be aware of I think just to answer that when we're looking at international comparisons we also have to look at the general government of that country's approach to the the private rented sector because for some of these you know they don't view the private rented sector as a sector of last resort they see it as as a sector where you know it's often the first choice for many in their country perhaps not in Ireland but certainly some of the other international comparators so you're coming at as David said rent control within a system of certainty without risk of retrospective changes to contractual agreements so it's a very very different sector so I think we have to be quite careful in terms of looking comparators do I think the same will happen in Scotland as it's happened in Ireland absolutely you know just I was just looking at you know our latest figures from from members and you know 14% of the homes that I talked about they plan to withdraw from the the sector when current tenants vacate now that's not something that I think that anyone wants to see in rural Scotland so we're seeing that intention there already yeah thank you and just finally I want to test with regard to the legislation it requires ministers to ensure that tenants affected by the rent cap and evictions moratorium receive appropriate information how do you think that's being provided to private landlords to make sure tenants are aware of the legislation and also the support of an advice available and do you have examples of good practice as well? Miles if I could just come back on the the previous question just one or two quick points I think as has been alluded to you know Germany is held as the great example of where you know just under 50% of the population rent for the long term but I think the key aspects there are that in the UK unlike Germany around 60% of renters run lower income whereas in Germany it's 40% and also you've got fewer landlords letting more of the property so it goes back into certainty and what is that long-term vision that the Scottish Government have for the private sector in Scotland and I think the second point I'd make is when we're talking about new investment well we had the Scottish budget in December and we've just raised the Scottish Government's just raised additional dwelling supplement to 6% so on the one hand they're saying that landlords are putting up rents just for the sake of it and now they've given them your reason to do it and no reason for new entrants to do it so I just think the economic policy has to match up with the housing policy yes within ADS there's an exemption if you purchase six or more properties but perhaps is that aligned to the number of landlords individual landlords who own property in Scotland that's probably about one or two on average so this needs to be some sort of joined up thinking towards investment going forward obviously we would like to the surcharge reduced or at least that ADS looked at and I know that that is being looked at but on the whole there's got to be a review of all private tax of taxes relating to private landlords and the income and that is having I think on the issue you've said about advice on the legislation certainly back in November December 86% of our members have said landlords had come to them you know for that advice and information we've certainly used information that the Scottish Government provides we do a liais with officials but as a membership organisation we you know push out as sure the others regular communications fact sheets that members have access to a legal legal helpline so we're certainly doing our best to make sure everyone's aware of the changes yes the Scottish land and the sea it's been the same and we've also obviously been pointing tenants towards shelter Scotland and other sources of excellent information I think the biggest challenge for those of us in the sector was filling that gap between the political headlines and the reality of the legislation I think there's lots of opportunity for a sort of misconception and misinterpretation of what it actually meant in practice and when you read what's on the Scottish Government website it's you know quite naturally very technical very sort of league and converting that into something which was easily understood by both tenants and landlords fell to organisations such as ourselves and those supporting tenants so we had to move very quickly and we had to fill a real vacuum and direct advice from the Scottish Government and I think from from our side certainly I think some of the frustration that the some of our landlord members felt was that they had worked very closely with tenants throughout Covid and actually as a continuing part of the service I mean typically this would be larger scale developments and the judging from the you know the customer service that they do regularly highly effective in terms of the wider advice then similarly yes we'll point people towards the advice that's there from from Scottish Government and as far as we're aware that is well used by our agent members advising the wider PRS but certainly for the larger members I think there was a lot of frustration that they felt that they'd they'd worked very proactively during the difficult times of the Covid period in particular so I think that was also bound up in some of the frustrations expressed with the with the legislation underscrutiny today. Thank you. Thanks, Carina. Thanks, Miles. Now we're going to bring in Maria McNair with some questions. Thank you, Carina. Good morning, panel, and thanks for your time this morning. I wanted to ask the panel of the thinkers any additional measures that the Scottish Government councils and landlords could take to support tenants and landlords through the cost of living crisis and I'm aware that some have been touched on but do you have any further suggestions you wish to give to the committee? David? So I mean I think the the first point advice we have for tenants that are facing challenges I mean and probably energy bills and things like that would probably be the big ones for reasons we've described on the rent is talk through it first of all with your landlord because the landlord will wish to retain a good tenant and I think the I think the discussion might often be a lot more positive I mean I will admit we're probably speaking from a larger landlord perspective perhaps but I think reinforcing and I think maybe aiding some of the advice that's put out there by the Scottish Government it is Sarah Jane's absolutely right it can be quite dry and technical that's put out there but I also think investing in some of the pre-existing services that were there and obviously the the role has slightly changed with this legislation such as rent service Scotland people like that certainly when we've had the odd call we've said you know look are you aware that these are your rights these were your rights anyway as tenants and I think investing in some of those services as a point of contact for tenants who who don't have that collaborative relationship with with landlords for whatever reason I think would be tremendously helpful particularly with I don't think this has been touched on the changes in policy and legislation being so frequent I think I think that could help because I think RSS I think have been quite stretch resource wise and there's anything you think that kind of local government could do I think local government equally very pressured on the resource size and I I've always felt it's maybe not not being as wholly invested in as it should have been with the various approaches to landlord registration regulation the proper person and I think I don't I don't think that's I don't think that's helped us get to the position we are and so I think yes because I think people you can understand tenants would wish to turn to the local authority for that independent source of advice if for whatever reason the relationship with the landlord or the landlord's representative isn't as collaborative as it could be so I think that that could definitely help Sarah yeah and David mentioned the landlord registration and you know you have a source of data there where I think local authorities and some already are could use that to proactively send out very simple simple messages whether it's pointing people towards sources of advice or again you know just letting them know what the exact situation is I think you know that there's the advice side but there's also some structural changes I think they need to happen and I think we need to make sure that the first year the housing tribunal is adequately resourced that's possibly seen as more support for landlords than tenants but when you look at the fact I think that the latest case average was about 137 days from point of application to decision you know we have to make sure that those are being dealt with in a timis manner so that helps landlords confidence if they know that they do have an issue that it's dealt with timely that can really help in terms of the whole sector I do worry though that you know we've got sticking plaster measures I call them you know advice and support but the one thing we have to do is tackle the housing supply issue a lot of this is driven by the fact that there is not enough homes in Scotland so local authorities have a you know a key role to play whether it's in terms of housing land working with RSLs working with private landowners to to the fast track housing in Scotland but the only way we can do that is if we have the investors confidence so we can do sticking plaster fixes at the moment but we have to sort out that wider longer term problem thank you thank you I think I'd agree definitely in the short term it's about providing local authorities with more investment to offer more services on you know directly to tenants and landlords that come to them and and deal with the registration scheme and also what our agents you know report is to enforcement as well you know to enforce existing and existing requirements against irresponsible landlords but I think in the in the long term you know ultimately um you know we need to say with James Lewis more more social house building um we certainly are lobbying the UK government would urge others to raise local housing allowance uh rates to support the welfare but I think also something else we talk about in terms of upfront costs and affordability for tenancies um you know help with the deposit schemes advertising actually they can be paid in instalments local authorities could create bond schemes in order to help they could work with local employers in the area to offer um you know those loans and help with upfront costs for for tenants as well thank you moving on to the next question um do you have any comments about the impact of legislation on student tenancies and do you agree with the Scottish government's plans to suspend the rent cap on student tenancies? Sarah-Jane? So, Scotland and the States doesn't tend to be involved in the student rent sector so I think I'll probably leave this to Tim and David. Sure. We do have a lot of members in the purpose-built student accommodation sector undergoing its own reviews at the moment as well. I think some of this was a sense of practicality as much in the fact that the nature of those tenancies would be there'd be a there'd be a stop obviously of the academic year and a restart. I think it was almost as much a recognition of the reality that we were that we were talking a breaking tenancy so new tenancies can't coming forward and obviously by the time the legislation came in you're already into the academic year as well so I think it was more I mean I think it's still been monitored by the government I think that's that's that's what's beside it so I think there'll be a very close view on where student accommodation rents end up in the new academic year as they come forward but I think it was more a recognition of practicalities I think as opposed to any particular political or policy perspective. Thank you. Timothy. Thank you. I mean similar to Sarah Jane our members don't directly work in the purpose-built student accommodation area but I think certainly the feedback that that is there there must be a level playing field and I think there's certainly been a lack of clarity between purpose-built student accommodation tenancies and the PRT anyway with the removal of the the fixed term and the impact that has on landlords operating with with students so I think we would say that that is the is the main issue and should be considered for all accommodation and I think that finally broadly kind of plays into our whole response to to the legislation is that all tenants you know you respected of their property type should be afforded the the same rights and these rights you know need to be balanced with the the risks of all accommodation providers. Thank you. Thanks Marie. That brings us to the end of our questions and I'd like to thank you for coming in today to give your evidence and I now suspend the meeting to allow for a change of witnesses. We are joined in the room by David Bookbinder who's the director at Glasgow and West of Scotland Forum of Housing Associations and Caroline Lockhead who's the director of external external affairs at the Scottish Federation of Housing Associations and we're joined online by Mike Callahan who's the policy manager at COSLA and Sharina Peake who's acting policy manager at the Association of Local Authority Chief Housing Officers otherwise known as Alacho and I welcome the witnesses to the meeting. As mentioned to the first panel we'll try to direct questions to a specific witness where possible but if you'd like to come in please indicate to the clerks and Sharina and Mike as you're appearing virtually please do this by typing an R into the chat function and I will open questions with a couple of questions on the the rent cap. I'd be interested to hear how Housing Associations and Councils reach the voluntary approach on rent rises with the Scottish Government and how does the approach balance the need to keep rents affordable during the cost of living crisis while allowing social landlords to maintain and invest in services in stock and maybe I'll start with you Caroline Caroline and then go to David and then I'll go online. Thank you and thanks for the opportunity to speak to the committee this morning. In terms of how we reach the approach so and balancing the need for affordable rent with the need to to maintain homes and to build new homes providing affordable housing is obviously what housing associations exist to do they are charitable organisations they are not for profit and all of their income goes back into into communities so it was really it was vital for our members that we were able to find a way to allow them to continue to do that so as you can imagine there was a great deal of member consultation we held a meeting with our members just days after the announcement was made which attracted about 100 of our members so I think that demonstrates the level of concern about the impact that an ongoing rent freeze would have had on their ability to do the things that they need to do. We did a number of things that you would expect us to in terms of giving evidence to committees and discussions with politicians and the the statement of intent that we finally published reported on the average rent increase that we expected to see based on the data that we had from our members and I think that allowed us to demonstrate that actually housing associations would always keep rents affordable that is what they exist to do last year when we had inflation at 9% we saw an average rent increase of 3.3% so I think that demonstrates that that was always going to be the case and we hope that the statement of intent which was based on six principles with associated actions for both housing associations and Scottish Government sets out that actually that approach can continue that our members will continue to prioritise affordable rents and good high quality safe housing as we go on that there were a lot of concerns I would say about the implications of the act that was introduced in terms of it restricting our members' ability to do that but we think that the final statement that we published and that Scottish Government accepted as their basis for not continuing the rent provisions of this legislation we think that that does balance our members' responsibilities with the considerations that Scottish Government were taking into account when they introduced this legislation thank you for that David do you have anything to add first of all thank you again to the to committee for inviting the forum in yeah I agree I agree with everything that carolin has said that we the sector is so so relieved to have got to a point where the balance between the sort of the shorter term the impact on tenants of the cost of living crisis and the longer term need to invest was was fully fully fully recognised the loss of income from a single years freeze is quite alarming when you when you look at the the compounding over over 30 years of what what investment income can be lost I think our message similar to the sector as a whole the whole social housing sector was that for 40 50 years or more the sector has been trusted to to consult with tenants and come to the right arrangement never easy decisions but the right arrangement for that that housing association and one that looks at future investment we've never ever been at a point where we're more aware of the need for future investment in the past that's sometimes been been discussed mostly in the context of new build and trying to contribute to new build I think what's on every housing association and local authorities mind at the moment is the is the the size and scale of the retrofit agenda and coming at the same time as the cost of living crisis is that need for balance that's been on that's been on everyone's mind and I think we've got to a point where we continue now to be trusted and it wouldn't expect the issue of rent control in the social sector to to be raised again Scottish rents in the social sector at 25 30% lower than those in England and we've managed that without any rent control at any point thank you David I'm just checking online is any Mike would you like to come in yes thanks very much and convener and for the opportunity applied some evidence to the session local authorities have obviously have a substantial interest in the function of the entire rented sector in Scotland majority of more than two thirds are our landlords managing half of social housing across the country it's local strategic housing authorities all local authorities seek to improve supply and overall condition of housing stock along with the registration license of a private landlords and HMOs across local areas over a fifth of houses part of local authority rented stock local authorities tend to have the lowest rents across the country and local it's very responsible landlords local authority leaders last year recognised that severe financial crisis facing many of our tenants and other individuals and households across the country local authority leads also recognise the high rate of inflation around heating and food that disproportionately affects those on low incomes our disadvantage in the proportion of individuals income spent on accommodation in the rented sector as a result cosla in discussions with the Scottish Government came to agreement with our member councils on a cross-party basis to agree a statement of intent on rents to maintain future rent levels beyond march 2023 at a very low rate for local authority tenants with the intent to keep the rent increases to something that's highly affordable way below the level of inflation so this was essentially done on a cross-party basis it reflects how it shared ambitions and intent to maintain rents in affordable quality housing albeit it has to be said it doesn't come without its challenges for other aspects other shared ambitions that local elected members and also members of the Scottish Parliament have in respect of working towards maintaining quality housing reducing homelessness and maintaining the pace of new build housing and the support energy efficient measures but maybe going into that more detail into discussion but essentially we've got cross-party agreement across all local authorities and without statement intent and local authorities are setting on rent levels just now in consultation with the tenants and also with the local elected members' bright and oversight of this thank you thanks very much for that response mike and i'm just to say that unfortunately i was about to say unfortunately shirena was not here but she's here shirena that's great that you've come on i had asked the question i don't know if you heard it but so i'll repeat it i'd ask the question how did housing associations and councils reach its voluntary approach on rent rises with the Scottish Government and how does the approach balance the need to keep rents affordable during the cost of living crisis while allowing social landlords to maintain and invest in services and stock and everyone else has had a chance to respond to that if you wanted to add anything that would be welcome thank you so it's really building on what mike said from consular we reached this as a membership with local authorities as to what we thought would be the most beneficial for our tenants at the end of the day we still need to be able to deliver improvements to homes so the five pounds a week seems like the level that would be the most appropriate it would stay in line with affordability it will pose issues we will not be able to do as much as we would like to do due to that investment being much lower but we feel that given where we are that's the best solution at the moment and i think that kind of the consensus of the lachau members thank you very much for that so i'm going to stay with you and just because you already said you know that it's going to pay pose issues so i would be interested here from you you know what the impact of a below inflation rent increase would have on social landlords capital investment plans for building new homes and investing on existing stock what are the difficult choices that are having to be made in that regard okay thank you so basically we will be struggling i think to be able to deliver each two the cost that we think it will be will be around six billion pounds to be able to bring homes up to that standard now we also need to be able to improve the quality of our homes so we've got our capital investment programme to put in new kitchens and bathrooms and improve the quality of our tenants homes which is exactly what they want us to do when we put out our consultations to them and we say how would you like your rent to be spent those are the things that they would like to see they want to see the retrofit being done to their homes to make their homes energy efficient to mean that they haven't got to spend as much money on their utility bills those are the things that tenants really want that that's the improvement to their lives and allowing them to thrive i think also our new build programme the grant funding that we get isn't really sufficient we've seen the cost of construction going up materials going up so being able to balance the priorities of what our tenants need in their existing homes and being able to use investment to build new homes means that we have hard decisions to make ultimately those decisions have to be guided by our tenants as it's our tenant's rent so it will probably mean that our house building programmes will unfortunately have to slow down which given where we are with the amount of homelessness and pressures on our housing stock it's not ideal thank you very much for that response and caroline i'd like to ask that question to you as well thank you yeah i think um what we will see on the basis of the average rent increase that we have reported is we expect about 80 million pounds of lost income to our members and obviously that has an impact in terms of exactly what serena was just describing their ability to do the planned maintenance to to maintain and to retrofit homes so we will certainly see an impact and there are difficult decisions to be made about that um we obviously have some quite a number of members who really worked hard to keep um to keep rents particularly affordable during covid some didn't put rents up at all so it's worth noting that some are really starting from a position where by now they would have been hoping to be able to make some of that back and um are now having to look at really difficult decisions there about where they invest and what they're able to invest the other point i think is about certainty and stability so david's already mentioned that our members work to 30 year business plans and that has been very difficult over the last few months not knowing what the situation was going to be and and now obviously having to factor in quite a different situation than they had expected to be that all has an impact on their ability to to carry out those business plans whether that's in maintenance of properties whether it's in new build we have certainly seen members pulling back from planned new builds they've been slowing their maintenance plans and obviously that that has an impact as well it's probably also worth noting that it's not just about the regulations in the social sector a number of our members do also provide mid-market rent which is a private sector tendency so therefore is affected by the private sector rent cap and we are certainly hearing from them and their ability to to build that kind of tendency which is really much needed is a part of the affordable housing supply programme that tends to be attractive to people who aren't likely to qualify for social housing but still are living on a fairly modest income and the ability to provide mmr as well as the ability to build new social housing is likely to be affected thank you very much for that now i'm going to move on to questions from mark griffin who's joining us online line i just wanted to ask a question that around mid-market rent first since carlin had brought up before i go on to my question and you know we've got multiple panels today we've previously had the private sector and now we have the social sector but you know well mid-market rent tendencies come under a private sector tendencies at its social housing providers who are developing and providing those tendencies and i just wanted to come to carlin and to see if sfha essentially have what are your views on whether there is a practical solution that moves a mid-market rent tendency out of private sector tendency again so that we don't have a catch-all situation that is effecting investment programmes for the market when? Initially we had sought during the cost of living act when it was going through parliament we had sought to have mid-market rent where it was provided by a registered social landlord or a subsidi we sought to have that designated as social housing so which would have meant that it would have come under the social housing regulations and not the private sector and unfortunately we weren't successful in that so we now see that the next opportunity to sort this basically is the housing bill which we know will be coming later this year we understand there is quite a lot of pressure on scottish government to get that bill written essentially so we are we are very hopeful that there will be room within the housing bill to to i mean essentially you're talking about creating a new kind of tendency that's what we think is the solution and obviously we'll be very open to talking to government about about other options but that seems to us to be the solution we very much hope that room will be found in the housing bill to do that because the the effect of not being able to to fix the issue so that mid-market rent can continue to be built and provided by our members with all of the protections that's built into that so mid-market rents are set around the local housing allowance level you get a three-month notice period if there's a change of rent so there's a lot of protection built into it it's a good it's a good product so we very much hope that we can find an opportunity in the coming months to fix it okay that's a heads up for what to look out for in the housing bill so thanks for that carlin to move on to my other question for all members of the panel today just to ask that the statement of intent agreed between housing associations and the scottish government sets out that housing associations will seek to mitigate as much as possible in the cost implications of inflationary price increases and interest rate prices I just wanted to ask members of the panel how are they essentially doing that how are they protecting tenants against cost increases and perhaps come to deal first yeah I think I think there's a short term there's a short term sort of response here from social landlords the mitigation is by having increases significantly below inflation and as carlin and others have said we're talking about that's probably the third or fourth year uh in succession that that's that's that's happened so um the that's the initial way I mean investment plans might not change instantly but the but the rent is below inflation and that's our way I mean I'm amongst our members uh it is something like five five point one percent uh at our last count it's not dissimilar to the the sfha estimated six percent or six point one percent figure the still still rent rises well below inflation so that's the main protection the way we will deal with that I suppose in practical terms in in the coming years is probably initially that kind of kitchen bathroom scenario that that Sharina mentioned um do we count can we lengthen the cycle in which kitchens and bathrooms are replaced when is that appropriate when is it not appropriate and that's that's an issue we can only sort out in consultation close consultation with with tenants the other I suppose the other way in which money might be saved uh because we've had so many years of below inflation increases is that this sort of watch and wait scenario that that is is with us around the energy efficiency agenda because we're not sure what public money will be available we're not sure there's so many uncertainties about you know the future of gas and hydrogen hydrogen um the technology the heat pumps etc there's still a lot of watching and waiting to see what scale and the investment is going to be needed and and what the pace of that will be so that's probably from a social landlord point of view where some of the compromises will need to come but hopefully always in the best possible consultation with tenants thanks for that David I saw Sharina wants to come in and then carolin thank you and so just to answer that question from a local authority point of view we're working with our tenants to be able to see what financial assistance we can give them looking to do income maximisation and then as David pointed out there it is about reviewing our delivery programmes and kind of saying how far can we push things out we certainly don't want to mean that tenants aren't getting the level of service that they want and and having these home improvements but through engagement and consultation when we've gone out to our tenants to kind of tell them what the rent increases will mean we have set that out to them to say that it may be that your kitchens and bathrooms won't get done this year it might be that it happens in the next couple of years so we we have been doing that engagement with tenants just to make everybody aware that tenants have been informed about what rent increases and not being able to increase rent at the level that we need will mean for their homes thanks very much carolin just to expand on that in terms of how housing associations are supporting their tenants as well as doing everything David's already outlined many of our members provide services like energy advice services welfare services employability services links with local community opportunities many of them employ people whose job it is to maximise their income so to make sure that they're getting all the social security they're entitled to which can result in really significant sums and because housing associations work closely with their tenants they can target that support and make sure it is getting to the people who particularly need it most recently we've been able to work with Scottish Government on a couple of funds so we've had SFHA has administered the fuel and security fund and the food support fund both of which have involved our members being able to access new funding to provide cash first support to people who are really struggling and it's with things like direct support to meet your energy costs clearing your energy of years just cash to buy food insulation items that kind of thing so those are a number of the ways that our members are able to to try and support their tenants thanks and Mike you wanted to come in thanks convener just to briefly add to what shrena from a lecture mentioned about local authorities working proactively with their tenants to maximise incomes help and pay the rents and help them really tackle the cost 11 local authorities across the country have also been providing our raft of other initiatives to help the tenants ranging from energy poverty initiatives to fuel hardship funds to a range of others to helping their tenants we've always had a rent freeze for some time and with the statement of 10 that's essentially a real dry to keep rent levels in the next financial year as a way below inflation and as affordable as possible thank you thanks very much Mike and I'm going to move on to questions from willy coffee thanks very much convenient good morning to everybody in the panel I just wanted to touch base with you on the moratorium and evictions that I should maybe ask each of you just for a brief overall perspective on the impact that that has had beneficial or otherwise for both tenants and landlord so start with you carlin thank you I mean the first thing to say is that housing associations do not want to evict tenants they work very hard to sustain tenancies they provide all manner of services to try and work with tenants to to make sure that they don't get to the point of evictions and we would always say that the first the first move for any tenant who's worried about their ability to pay their rent is to speak to their host housing association because they can and they will help in terms of the impact I mean our members were very clear with us that they were a lot more concerned about the impact of rent restrictions than they were concerned about the essentially continued restrictions on evictions we the sector has been dealing with these throughout Covid so in terms of a set of priorities that that was fairly clear and I think we have seen with if we look back at the figures from before the pandemic which is with the last time that there wasn't any restrictions on well any additional restrictions on evictions and we can see that the level of evictions among housing associations and social housing was low we we are not particularly hearing from our members that the continued restrictions are having any new impact I think that the feeling is that we can we can live with these and there's there's a lot of actions that housing associations have to take before they even get to the point of of a notice of proceedings the one point I would make is that it's not unusual for the first time that a tenant actually starts engaging with our member about the issue of rent arrears is when that notice of proceedings arrives and that can be for very good reasons they've got really serious concerns about the implications but I suppose that's the only point we'd make about the continued restrictions on when you can actually begin that process is it is often that's the first time that the tenant will engage okay thanks carlin david yeah I mean eviction again as carlin said very much last resort our members as local community based housing associations really pride themselves on on on being close to their tenants and being able to intervene early when when when an issue with rent arises and the reality is that associations will hope if they're engaging with tenants then even relatively high levels of arrears that have built up there'd be no question of that leading to eviction if a tenant is engaging and and trying to address address the issue we've not had a obviously significant number of evictions for a long for a long time now for reasons that everyone's familiar with I think one of the very specific reasons why the current moratorium can be tolerated in in our sector and as carlin says he's not is not bringing a lot of members forward alarmed about the the consequences is that unlike the covid evictions moratorium we now have a minimum sort of there's a there's an exception for arrears that are above an equivalent of what is estimated to be six months arrears I think it's 2250 now most arrears cases that get as far as you know getting near to decree and near to eviction are usually in the three four five thousand plus kind of arrears so in that sense although we don't want those cases we still don't want them to go ahead to eviction technically they they could do under the under the wording of the of the current moratorium and that's that's helpful although we still don't want it to lead to evictions okay thanks David make then sure enough thank you can thank you for the question local authorities as landlords take essentially our preventive approach to evictions and homelessness and comply with the housing 2010 act the reactions required for rent arrears means local authorities would only ever seek to evict the tenant as a very last resort having exhausted every other option and essentially that's that's how local authorities operate because we need to help them to ensure and maintain help people in their tenancy and manage them and ensure help them ensure that repayment factor or rent arrears can be managed effectively and so during the process period the the mayor just said legislation that's actually not had an impact on the eviction levels of our tenants essentially because we've been fought local authorities being fallen through on these processes thank you thanks Mike lastly Serina thank you yeah just echoing the same as what the other panellists have said we haven't seen very many issues coming from our members at Alachow and like Mike said we do work to prevent anybody being evicted putting into place any support that people might need the repayment processes so it's not really made a massive difference to local authorities okay thanks for that and just maybe a final question possibly just for you Serina have you noticed if the councils have noticed that the homelessness applications dropped during this moratorium and conversely would you anticipate that it might go back up if the moratorium ends I don't think we have seen a drop what we have seen in some areas is that there have been people who have been asked to leave the prs coming in the homelessness figures you will have seen in the last quarter have gone up but I don't necessarily think that it would have anything to do with the private with the social rented sector because as we've all said David, Carolyn, Mike and myself we would not ordinarily be pushing for anybody to be evicted from our tenancy okay thanks for that thank you really I'm not going to bring in miles breaks thank you can be no good morning to the panel thank you for joining us here and online I'd like to ask a couple of questions the first one with regard to the pause on evictions to the end of September 2023 and how proportionate and necessarily you felt that was Carolyn I'll maybe bring you in to start thank you I suppose as we've said the housing associations do not want to affect anyone it goes completely against what they exist to do there's no incentive for them to to affect people so it's it's certainly not something that their members are bringing up with us particularly regularly and in terms of its proportionateness I mean we do understand that we're operating in the context of a cost of living crisis we do understand the desire to take measures to protect people and that's that's a right thing for government to be seeking to do and I think we our members feel that we can continue to live with it particularly with the amendments that David has outlined I think at some point we would be keen to return to a more stable system where we're not seeing these short-term interventions but I think members feel that that it's something that we can continue to to work within is that what I would simply echo that whilst being relatively relaxed as a sector about about this particular intervention it is that sort of principle of intervention per se whether it's around rents whether it's about evictions that always makes our sector nervous that members will remember that some years ago that the Scottish Housing Association sector faced a bit of a crisis where the the ONS had classified housing associations as public bodies and that meant that the public debt lay on the the government's sort of accounts and that had all kinds of implications so we're always nervous about that that broader issue of if you like state control or state intervention but but as such the evictions one as has been said has not had has not had major implications it's that principle really. Does anyone want to come in online? You've already touched upon this in terms of the impact it's potentially had on future funding decisions and rewriting of business plans. Is it fair to say this has destabilised the social rental sector in Scotland and going forward do you think the government now understand that? I don't know if our online members want to come in on that. Thank you. Yes it definitely has the the cost of living act has had an impact on the finance and the 30 year HRA of local authorities there's no doubt of that and I think we also need to bear in mind that where local authorities can't plug the gap in housing we are looking to institutional investors to come in through perhaps to rent long term leases and what they need is long term stability so I think any shocks to legislation whereby rent caps are put in have meant that some investors have thought perhaps Scotland at the moment isn't the place to invest and then as I said earlier at a time when we are in an acute housing shortage that investment is still needed thank you. Mike, you want to come in too? Yeah that's a very good question and I echo the points that Shorina said. We have shared ambitions and aspirations for housing in local elected members across the county as well as members of the Scottish Parliament but going forward it's going to be a real challenge in respect of how attainable they're going to be within the time frames that they're working towards regarding maintaining quality housing, reducing homelessness, maintaining the pace of house building, supporting energy efficiency of homes and for that as a particular example that's going to be a real pressure for energy efficiency standard for social homes housing in respects of our business plans, housing review, care business plans that Shorina has alluded to. We don't receive any Scottish funding towards generating rents locally. We're reducing our rents and making them affordable quite rightly for our tenants but that means a very significant gap in respect of local authorities having the ability to fund each to energy efficiency housing so we really need support and we need a new pragmatic approach regarding the funding to deliver energy efficiency. Recasting each to an element of critical national funding would help some consideration towards that or if that's not feasible looking at the time frames by which the social rented properties are required to meet high energy performance levels could be a consideration but obviously we think the funding side of things that would be a real priority for us and a new pragmatic approach to that. Thank you. Just to say I mean I we can argue about the term or the word destabilising I think there's a there's certainly a greater degree of nervousness and hesitation if you like amongst our members. I'll give you one example actually related to new build because some of a lot of our members are smaller local housing associations and I know of one or two who've kind of they've got a site left that they'd like to develop in their area and they are they're much more hesitant now. I mean in the past new build it's technically it's a combination as members will know of grant plus private finance there's also been a third element of that in some cases where associations have been able to put in a small amount from reserves for example as a just a capital sum to to effectively add to the subsidy. The ability to do that now is there's going to be much greater hesitation about about doing that and I mean obviously very much hope that the current hesitation around the new build programme it doesn't last but it's certainly there amongst members just a more a more cautious approach. Absolutely, if I can just make a couple of additional points there. I think exactly as David says the confidence in terms of building has been shaken and I think that matters in terms of lender confidence so in any new build project the government funding pays for roughly half of it and the other half is private finance so we need private lenders to feel confident that this is a stable sector so that we can build the houses that we know are really desperately needed so that I think has been affected in terms of when the proposals were made they came at the point where members would have usually been going out to to just start that process of consulting their tenants setting out what their potential plans were then taking it back to their boards going through quite a well-established process of setting rents in a very stable way and that was really disrupted. Some members chose to just delay the whole thing so that they consulted much later which meant that they were much later in giving their tenants any indication of where rents would be. Some members consulted earlier but did it in the context of really not having any idea of what they were going to be allowed to do so that there was a great deal of stability and of course all of that distracts you from the things that you had been intending to do. In terms of you also asked whether Scottish Government now has an understanding of that impact. I think we did feel that Scottish Government listened quite carefully and understood the arguments that we were making so I think we feel on the issue of social rents we got there. I think there's still an outstanding issue in terms of mid-market rent that we've touched on and we certainly hope to get a good hearing on that. Thank you, thank you. Thank you Miles, and I'm going to bring in Marie McNair. Thank you, good morning panel, it's really good to see you this morning at the committee. As you're aware the legislation requires Scottish ministers to ensure that tenants affected by the rent cap and evictions modatorium received appropriate information advice and support with measures in place. How effective have the Scottish Government been in doing so and do you think that there's NLs that should change and I'll pop that out to Mike Storff with him? I think that your respect have provided an important, obviously a political organisation so I think that my colleague, Rymol Achiam, I'm sure he might have a bit more information from a regular data contacts with some of the chief housing officers. I understand that information has been provided in respect of changes because local authorities are currently being consulting on the new rents for the next financial year as they're going to do by law, which is obviously overseen by local elected members. Obviously we've been used to working to ensure that evictions don't take place and certainly is a last resort. Maybe my colleague from Elacian might be able to play some more comments on that one. You've asked there about tenants affected, what information advice and support has been given to them. Local authorities have obviously gone through their consultation process and been able to set out what the different rent levels will mean. They've been able to get in touch with tenants who they know are most in need of support and are able to offer them advice. We've done income maximisation, we've got our website to have been updated to be able to signpost people to relevant other support networks and agencies that they can go to. Our local authority members have been pretty proactive in making sure that tenants are getting advice and support. Thanks very much and anybody in the room want to come in on that? Caroline? Yeah, just to add to that, I think that by the very nature of this was emergency legislation, it moved very quickly. That meant that the ability to provide people with robust, clear information was quite limited. We certainly worked with our members to provide them with a template letter to tenants and we worked with the tenant representative organisations on that too, particularly because of the timing of when that was happening. It was quite confusing for people to say that I'm being consulted on what my rent level should be for next year but I'm reading that there's a rent freeze, so what's going on here? I think that because of the very, very fast nature of the legislation, it was really quite difficult to give people clear information. David, do you... I had every sympathy for tenants actually because of that very mute point that you're asking me about the rent rise but I thought there was a rent freeze, so I did have a lot of sympathy for social housing tenants there. My last question, I've asked it previous, the previous panel and I know it's been touched on slightly and some really good suggestions we made in the room, but do you feel that there's any further measures that the Scottish Government and councils and landlords could take to support tenants through the cost of living crisis? Dare I say it, I might hazard that take a slightly longer term view of the cost of living crisis will be with us for a while and particularly in relation to fuel, so I think the best mitigation that we can come up with with government and as a sector is public subsidy of retrofit measures for energy efficiency because if we don't get the fabric right, we don't want to be put to the fabric of the property, if we don't want to be putting more expensive electrical heat pumps and others into leaky houses, so the extent to which first of all fabric of social housing, to get it to that, that costs more proportionately, we've done the low hanging fruit, it costs a lot more proportionately to go from an EPCC to a beef for instance in the existing ish standard, the more that can be the subject of public subsidy, we take the pressure off rents and we help lower fuel bills. And also I would say we'd want to see the Scottish Government continuing the investment that they've made already in things like the food insecurity, fuel insecurity funds to actually get targeted support directly to the people who need it taking a cash first approach and I think it's probably worth seeing there's also measures that we need the UK government to be taking in terms of protecting people from the energy price increases that we are seeing, we've certainly called for a social tariff for the most vulnerable customers, we would like to see issues with pre-payment meters being addressed, so I think both Governments need to be taking action. Thanks for that Mike, sorry Isha. Shirina, in the nails you want to add. I would just reiterate what David has said there, the retrofit is really, really crucial and we need our homes to be able to be improved to reduce the energy costs for our tenants, so that would definitely be one of the ones and the point about the pre-payment meters, we know that those do tend to be much more expensive and they tend to be in the homes of tenants that can least afford them, so those would be the things that I think would help to give tenants back a little bit of money back in their pockets to be able to take care of their other needs, so those would be the asks from Elacio members. Thank you. Mike wants to come in from Coslav. Thank you, just to add what's being said, the local authorities have been very proactive for a wide range of initiatives across councils to help and support people during the cost of living crisis, including the tenants with, as I mentioned before, energy poverty funds to help people who have been in the bills, but also other initiatives such as hardship funds and other funds that augment social welfare funds. I think that there are points to be said about helping support from the Scottish Government towards energy-efficient homes, as well as support from the UK Government, too, is what Carolyn has mentioned about pre-payment meters, and the other issue that we have is still outstanding around empty properties across Scotland, too. Those would all assist and support us in the housing sector in Scotland. I have an additional question, because you have all talked about the need to retrofit your existing housing stock. Carolyn and Mike have both mentioned the need for the UK Government to support around the pre-payment meters. However, if something has come to the committee before, and maybe we have even been in the conversations around that, it is the fact that retrofit property is 20 per cent vat. You may not have the figures on top of your head, but 20 per cent vat on top of anything that you are retrofitting is a big amount to add to the bill of doing that work. I would be interested if you had any thoughts on that, on what we could be doing, on how we could get the UK Government to open up and review that vat. Is that piece of work that the committee is considering doing? The importance of that has often come up in relation to the ongoing issue where you have mixed-tenure stock and you are looking for owners to pay their share of repair and improvement works and, of course, energy efficiency works are coming down the line. That imposition of 20 per cent vat makes that job even harder. Often owners are just not in a position to make those kinds of capital payments. I have been in the sector 30 years in Scotland, and I can remember writing letters in the 90s to chancellers about vat on repairs and improvements and the gulf between that and the difference with new build. It is perhaps something to revisit. Dare I say it, I do not know whether the exit from the EU situation changes or perversely increases our chances if we are not tied to the EU on that, but it would certainly make a huge difference. I think that it would generate so much more work anyway that the revenue, hopefully, could be rescued that way. Anyone else? Carolyn? Maybe just to say, I think that we would support anything that is going to make this enormous bill that we are facing for retrofit slightly less enormous and make it more achievable, so I think that it is well worth looking at. Thanks very much. Anybody online want to come in? Mike? Yes, thank you convener. I would obviously take a political decision in this, but I would be likely to be the case that I would concur with what is being mentioned by the other panel members. That would be something that would be supportive of us in respect of allowing us to retrofit more houses in the area at large housing stock across Scotland. Thanks very much. That concludes our questions and I want to thank you so much for coming in to give evidence and give us clarity on what is happening in your sector and I now suspend the meeting to allow for a change of witnesses. On our third and final panel of witnesses this morning, we are joined by Finella Gabrish, who is a member and Emma Saunders, who is the national organiser of Living Rent. Welcome. And Gordon Macrae, who is the assistant director at Shelter Scotland. And Colin Stewart, who is the chair of the north of Scotland regional network of tenants and residents. Before we continue, I would like to welcome Colin to declare his interests. Hi, thank you. Just to declare that I am on the board of the Scottish Housing Regulator, but I am here today as a tenant and chair of North of Scotland regional networks. Thanks very much. I welcome everyone to the meeting and, as with previous panels, we'll try to direct our questions to a specific witness where possible, but if you would like to come in, please indicate to the clerks. I'm going to start with a couple of questions. I'd be interested to hear to what extent you agree with the Scottish Government's decision to expire the social sector rent cap on provisions in light of the voluntary approach with social landlords and to implement below inflation rent rises. Does this, in your opinion, does this approach balance the need to keep rents affordable during the cost of living crisis while allowing social landlords to maintain and invest in its services and stock? When I'll start with you, Gordon. Thank you. The social dimension of the cost living act never really had much teeth for us. It didn't address the scale of the years, it didn't address the reality of rents, and I think that we're fairly all ready today. It injected it into the sector at a time when other activities were on-going. It makes sense in that light to expire it and to continue the collaborative work that's being going on, but we want to then say that all's good and well in the social sector. There's plenty of social tenants who are facing considerable rent increases. We've seen, whilst the majority have got below inflation, there was certainly consultation happening on some quite high rent increases, but we also understand why that's happening. A great deal of that is because of the additional costs that are being laid on social landlords at a time where it's the costs of developing new homes, the passive house, whether it's all these other things keep getting landed on the social housing sector and the money has to come from somewhere. Our main concern with the social housing dimension of the Costs of Living Act was that it was unfunded. If we're going to freeze rents, that is pushing a cost on to the sector. We welcome anything that stops people losing a home that keeps costs low, but it should have been a funded act so that funding continued and development plans could be maintained. Someone from Living Rent, I don't know if you both need to answer this, but I'll leave it to you throughout to choose who goes. Obviously, we provide evidence in October, so thanks for the opportunity to offer some further evidence today. Obviously, we just mind the broader context, so tenants continue on average to have lower household incomes, high levels of poverty and are more vulnerable to economic shocks. We are in a position where the cost of living continues to push people into crisis, wages continue to be stagnant, workers are facing real-term pay cuts and are resorting to strike action. Inflation continues to remain in double digits, energy bills have doubled in less than 18 months and are set to increase again. Poverty and inequality continue to run hand in hand and disproportionately impact women, children, the disabled and black Asian and minority ethnic communities. People continue to be at breaking point. Regarding this Act, at Living Rent, we believe that the cost of living tenant protection Scotland Act 2022, as it was introduced in October, remains both proportionate and necessary. We do disagree with the proposed rise of 3% rents in the private sector, given that many tenants and our members have already experienced unaffordable rent rises of 10, 20, 13 above per cent before this legislation was introduced. For people experiencing rent increase in the summer of 2022, when the pinch was already starting, this no mean that they never really experienced a rent freeze. In the social rented sector, we disagree that average rental rise of 6.1% as this is a voluntary and average agreement that may leave tenants facing greater increases whilst leaving a lot of the poorest people squeezed with rent increase and no benefits. This is exacerbated by the fact that grants for tenants who are struggling are running out. We know that 11 councils have already run out of tenant grant funds set up during COVID times and for us we need to ask what will be put in place for tenants to cope with these rent rises. We need to ensure that these funds are well advertised and appropriately topped up or face tenants notably entering more and more debt. I echo really what Gordon said, that the rent freeze didn't affect social housing tenants, because all social housing landlords put their rent up on 1 April, bar 1, and they do it at a different time of the year. Expiring it, yes, because it's not done anything. However, one thing that I want to bring up is the private renter, this 3% cap. If you look at the north east of Scotland, we've got a different situation to the rest of Scotland. After the oil industry collapsed, private rentals prices have dropped and dropped so we're at a situation now where social housing is actually more expensive than some private rentals. Now you've got social housing putting up their rents by 6%, 7%, 8% and private rentals are capped at 3%. It's only going to exacerbate the problem that we have in some areas. That's a very interesting piece of region-specific evidence. I'd like to stay with you and maybe you've touched on my next question. How well in practice are social landlords mitigating against cost increases to help protect their tenants through the cost of living crisis? I don't think that there's very much that the social landlords can do. They're very restricted in what they can do. The only income is from rentals. If they haven't got the rent coming in, they're not going to be able to protect tenants to a great degree. They're doing what they can, but that means that they have to stop the bathroom refit or the kitchen refit. So any legislation that reduces the amount of rent or income that they have in affects the landlords. They are talking to their tenants, they are helping them through, they're not doing evictions, but they're very stuck in what they're able to do at the moment. Thanks for that. I'm now going to move on to questions around the private rented sector cap from Miles Briggs. Good morning to the panel, thank you for joining us today. I wanted to ask firstly what impact you think the current rent freezes had on the ability of people furthest removed from rentals, from the housing market to actually be able to access a sustainable tenancy, and what evidence do you have of the impact of that? Yes, what impact? Confusion has been a significant impact. The national messaging around an eviction ban and rent freeze simply isn't accurate for the majority of our clients because of the provisions around excessive arrears, as it was defined in the act. We know that when it comes to a landlord's social or private, going through the necessary steps prior to eviction, that tends to happen at the point of no contact being made or arrears being particularly high. We gave evidence prior to the act passing, albeit more concerned with the social sector at that time, that this was going to make no difference and we've seen no difference. What we've seen in the private rented sector in terms of our case work through our law service and advice line has been an increase in what is relatively low level, but still an increase in harassment by landlords trying to say, well, this is going to come in, I'm going to have to increase the rent when the opportunity comes, maybe it's time to start thinking about where you want to be, you're starting to put that kind of pressure on. We also saw quite a few attempts to illegally evict. We had to intervene in a number of cases where private landlords were seeking to illegally evict. We'd caveat that with, obviously, we only see things when they go wrong. In terms of volume, how we represent that is of the sector as a whole. You would need other data points, but from a Shelter Scotland advice line and legal service, the direct impact of the way that act was presented publicly and the lack of support for tenants in the private rented sector, because when we look at the use of the tenant grant fund, it didn't go to people in the private rented sector at a proportionate level compared to the number of households in the sector. So less support for the tenants, more confusion for tenants and landlords very often, and just a bit of a gull to be honest in terms of what it meant on the ground. That's where we are working from now. We do think that, having said all of that, there is a need to find a way of stabilising and long-term lowering the rents in the private rented sector. I think that the other concern we have is that this is another example of a short-term initiative in the housing sector that has long-term consequences elsewhere. Is that need to have sustainable long-term planning and policy making that will make the long-term difference? The same experience. I'll just come in on that. I think that, as we said, it's more about private renting just now. The issue is that rents are extortionate and it's incredibly difficult for people who are the furthest away, as you say, of the rented market to access the rented market because they're extortionate and it's too hard. Earlier, people were saying that landlords won't take a chance on young people. We're not asking for a chance. We're not asking for charity. We're asking for rights. We're asking for the ability to just be able to access a home and pay for it. That is what is needed, is long-term rent controls that work within a tenancy and outside of a tenancy so that everyone can afford a new tenancy and aren't facing new hikes on that. It also points out the difficulty for tenants who are joint tenants who might face relationship breakdown and a joint tenancy are trapping them in their tenancy or they're having to do a new tenancy that's not covered by the rent freeze and face a rent hike. They're trapped between staying in a tenancy, continuing to pay rent, having a relationship breakdown, potentially being at threat of that or going into the market and having new rents that are extortionate. That points to the need for those rent controls but also a review of how joint tenancies work and how much protection they can give to both tenants. If I may just jump back to the previous question around social housing, I think what we heard is the problem is tenants are left to foot the bill because there hasn't been long-term investment by the government in social housing. Right now, there's almost like a bit of a blackmail, it's like agree to a rent increase or don't have the retrofits that you need to have lower fuel bills and that feels totally unfair and we're seeing long-term disinvestment from the government in new build social housing in existing social housing and that's pressuring tenants. Do you have an example of anywhere in the world though where a rent controls policy has delivered those outcomes? So you asked this question at the previous time and I answered at the previous time that way is in the UK you had rent controls. So looking at the impact which is happening currently in Ireland which I raised in the earlier session, do you not think that's going to be the same outcome here in Scotland?  At the moment, so we heard again an argument around supply of new builds