Led by Indigo House and funded by the Nationwide Foundation, the RentBetter research project was carried out across five years (2019-2024) to examine the impact of the Private Housing (Tenancies) (Scotland) Act 2016, which introduced significant reforms to the private rented sector (PRS).

The Act marked the first time in recent history that a UK nation sought to fundamentally change how the private rented sector operates.

Researchers conducted surveys and interviews with thousands of tenants and landlords to comprehensively assess the impact of the changes to Scottish tenancy law.

They say their findings are particularly relevant given the forthcoming Housing (Scotland) Bill, which was introduced to parliament in March 2024. Since the changes in 2016, which included removal of so-called ‘no fault’ evictions, the Scottish government has also introduced other reforms through emergency Covid-19 and cost of living legislation, including measures to limit rent increases.

The research suggests that the PRS cannot be fixed by top level legislation alone – a wider package is essential for tenants to benefit from improved rights.

It also found that despite having increased rights under the new tenancy system, tenants usually do not know about these rights or know how to use them, and their awareness of rights has not improved over the last five years (for example, one in three tenants do not know what type of tenancy they have).

Even if tenants know their rights, they struggle to obtain support or legal redress. This problem limits the ability of legislation to actually deliver for renters – they need access to proper enforcement and redress to be able to use their rights. Of the 1,000 renters interviewed, only 10 (1%) had ever contacted their local council enforcement team.

According to the research, legislative reform therefore needs to be part of a wider package that allows tenants to know and use their rights, including stronger and well-resourced enforcement.

Legislation is foundational to tenants’ ability to live in safe and secure homes, without undue negative effects on landlords. Overall, the vast majority of tenants (80%) surveyed in Scotland were confident that they would be able to stay in their current property for as long as they would like, and the proportion being ‘very confident’ has increased significantly over the last five years (27% in 2019 to 46% in 2024).

The 2016 changes have not had undue negative effects on landlord perceptions or actions. Landlords initial concerns about the tenancy changes proved unfounded, and landlords are in general now satisfied with the changes which brought in the PRT.

However, legislation has not gone far enough and must be strengthened. For around one in five renters evicted by a landlord who said they intended to sell, the property was not ultimately sold. This demonstrates that in a significant number of cases, renters are being unlawfully removed from their homes through abuse of the new grounds for eviction.

The government should ensure there are strong deterrents for wrongful evictions where no fault grounds are used.

Rent adjudication has only been used in a very small proportion of tenancies – estimated at under 1%, indicating that tenants are unaware of or unable to access the adjudication process.

According to the research, issues in the PRS cannot be addressed in a vacuum. Most tenants in the PRS feel ‘stuck’ in the private rented sector. Most would prefer to be living in social housing or owning their home but have no choice due to an inability to access ownership or social rented housing. There is a need for more genuinely affordable housing supply, including social housing.

An overall strategy is needed which confirms the role of the PRS, to ensure there are enough homes of all tenure types to meet housing needs and deliver sufficient truly affordable housing. Without such an approach, there is a risk of unintended consequences of PRS policy change that create increased demand pressure as against supply.

According to RentBetter, ongoing monitoring of the PRS is needed to understand the impact of policy changes and where more change is needed.

The research found that legislation to date in Scotland has not improved affordability in the PRS. Rent stabilisation measures have had some positive impacts: limits on in-tenancy rent raises have decreased rent increase levels for a minority of renters within tenancies, which were higher before the cap. This has increased security and affordability for some sitting tenants.

However, legislation has not delivered affordability as a whole, as advertised rents have continued to increase significantly. More needs to be done to deliver affordability in the PRS. Any action on rents needs to be carefully thought through and can only be effectively delivered in conjunction with a wider strategy.

Unfortunately, PRS tenants have learned to accept high rents. Of tenants who provided the proportion of their income they spent on rent, over half paid over a third of their income on housing costs.

Most tenants interviewed were struggling financially, but at the same time they said their rent was affordable. This disconnect suggests that there may be a normalisation of high rents, leading tenants to accept rent levels which leave them in financial hardship.

Joshua Davies, programme manager at the Nationwide Foundation, said: “This report underscores the critical importance of well-executed legislative reform. The Scottish government has delivered key changes to the private rented sector, but the job is far from done.

“Transforming the private rented sector hinges not only on fixing issues within existing legislation, but also empowering renters to know and use their rights. It is not enough to address isolated issues, we need a more comprehensive approach to reform.

“It’s critical that we view the housing system holistically, removing our reliance on the PRS alone to increase the availability of social and genuinely affordable homes.”

Anna Evans, director of Indigo House, added: “This has been a unique five-year longitudinal study of the Scottish PRS enabled by the Nationwide Foundation.

“It has shown that new regulation of the private rented sector (PRS) cannot rely on legislation alone, but must be supported by strong, well-resourced enforcement so that PRS tenants actually benefit from the good intentions of government policy.

“It has also shown that cultural change in the PRS takes time, and the collective effort of government, landlords, letting agents and the advisory sector must continue to ensure tenants understand and exercise their rights.”