The Housing (Scotland) Bill aims to improve housing outcomes for people who live in private rented accommodation and ensure a fair balance between protection for tenants and the rights of landlords. It comes as the Scottish government and an increasing number of councils have declared housing emergencies.

In its report, the majority of the committee welcomes the ambition in the provisions to re-balance the private rental sector and improve affordability for tenants.

However, despite recent announcements from the Scottish Government about how the rent cap would operate in practice, the committee has called for further clarity noting that continued uncertainty could impact investment within the sector, in turn impacting on choice and affordability for tenants.

There was also a recommendation to make Mid-Market Rent properties exempt from rent controls.

The committee concluded: “[T]here is an existing strong case for mid-market rent properties to be excluded from the rent control provisions in the Bill and recommends that the Scottish Government brings forward appropriate amendments at Stage 2. Once again, the Committee would reiterate the importance of providing certainty about the Bill’s measures in order to mitigate negative consequences for the rental property sector, and ultimately tenants themselves. The Scottish Government should provide transparency about its policy decisions as soon as possible and not wait until Stage 2 or 3 of the Bill process” 

The report also recognises that, in isolation, the bill in itself is not the answer to the housing emergency, which has been caused by a range of factors, including the shortage of affordable and social housing, increased rents in the private sector, high inflation, freeze of housing allowance rates, labour shortages linked to Brexit, and cuts in Scotland’s capital funding settlement from the UK government.

However, the bill does have a role to play in better balancing tenants’ rights with landlords’ needs, it says.

Speaking as the report launched, committee convener Ariane Burgess MSP said: “We are currently in the midst of a housing emergency and this bill is an important part of the solution to address that by redressing the imbalance in the relationship between tenants and landlords.

“For rent controls to be effective, however, there is a need for certainty for both tenants and landlords about measures within the bill and how the proposals will work. It’s disappointing that it was only last week that the Housing Minister made an announcement about how rent controls might work.

“The bill before us does not provide detail on many aspects of how the legislation will operate, and with consultation on some aspects of the bill continuing until 2025, there will be little room for parliamentary scrutiny in an area which is critical to get right for the long-term sustainability of the private rental sector.”

The bill also puts in place requirements for the collection of data from private landlords in order to make a case for the creation of local rent control areas. But with the onus on local authorities to collect and monitor the data, the committee is concerned that there is a lack of resources to deliver that requirement which could hinder the effective use of rent control areas.

Ms Burgess added: “For rent controls to work, there must be accurate data but the bill before us has no clear plans for robust data collection. This is why our report recommends that there is a national approach to data collection to help assess rental markets.

“We would also like to see the onus put on landlords by creating a requirement for them to routinely provide data rather than only respond to requests from local authorities.”

The committee also welcomed measures within the bill which support tenants’ rights to personalise their homes and their right to own pets. It also makes recommendations for there to be more support for tenants in exercising their rights, and for landlords too to help them better understand their duties, saying that legislation is not enough on its own to achieve the necessary balance between tenants’ and landlords’ rights.

Property agent body Propertymark said it was pleased that the Committee has called for further clarity because “continued uncertainty is impacting investment within the sector, which will continue to reduce choice and drive up the cost of renting”. 

Head of policy and campaigns Timothy Douglas added: “In particular, we are pleased to see the Committee recommend that the Scottish Government should ensure that it publishes annual reports on the private rental sector. We have long felt this is vital to ensure we have evidence-based policy making by decision makers. 

“There is still more to be done to strengthen the legislation and bring certainty for landlords, tenants and letting agents. Rent control areas need to be clearly defined and easily understood, periodic assessment of rent conditions by local authorities must be consistent and rent control should be linked to the tenancy not the property. As also acknowledged by the Committee, data collection on rents must be coordinated nationally and we should amend Rent Increases Notices so they include a way of collecting data on reasons for rent increases. 

“Propertymark will continue to engage with MSPs and the Scottish Government as the legislation moves to the next stage of the Parliamentary process.”