Work of the PRS Strategy Group Professor Douglas Robertson University of Stirling 17 August 2011 Victoria Quay, Edinburgh

Private Rented Sector Strategy Group Remit “To advise the Scottish Government on how it can support tenants, landlords and others to grow a professional, high quality Private Rented Sector equipped to provide sustainable housing solutions for Scotland in the 21 st Century.”

Work of Group to date Interventionist ambition: Private Rented Housing (Scotland) Act, 2011 Landlord registration / HMO licensing – ‘Fit and Proper Person’ – Registration number – Detection and enforcement Overcrowding statutory notices Pre-tenancy Information Pack – information, contracts up front – ‘rights and responsibilities’ focus Future clarification of premiums and deposits

Future work of Group Strategic ambition: 1. How can we create a 'smarter' regulatory and enforcement regime that will improve quality within the sector - smarter regulation and enforcement regime 2. Relationship between cost of regulation / management implications and its relationship to future sector investment prospects - demographics, markets and housing needs analysis

Smarter regulation and enforcement regime Encouraging a consumer focus A well functioning sector is one where tenants, landlords and agents understand their respective ‘rights and responsibilities’ and know where to go for further information / recourse New Act thus provides for a mandatory Pre-tenancy Information Pack – work on refining its contents and deciding best mode of delivery critical to consumer / supplier awareness raising Need to bring together & signpost, for all parties, best available information – need to cover landlord accreditation and new and emergent matters such as tenancy deposits. How should further information needs be best addressed? – information HUB and / or advice portal for the public, tenants, landlords and agents

Smarter regulation and enforcement regime What role regulation and self regulation? Current regulatory framework complex, thus challenging for landlords & tenants to understand & use Strategic review of regulation needed to ensure a clear and comprehensive regulatory system, supported by robust and effective enforcement – challenge is to engender tenants confidence and protection, while not placing unnecessary burden on landlords & agents – regulation should be proportionate to risk, allowing enforcement to concentrated on problem areas & worst landlord / agent practices Regulation of agents to be considered given core role in the market Concerns about how PRS will meet energy efficiency standards

Smarter regulation and enforcement regime Regulation & self regulation: Agreed approach Agree what can / cannot be achieved via Landlord Registration? – examine findings of Landlord Registration Review – examine funding of LA enforcement What would Agent Registration look like? – should it mirror the existing Landlord Registration arrangements – first need to set down a definition of an agent Consider what could be achieved in a tie up between Landlord Registration & Landlord Accreditation in relation to setting improving standards – accreditation & registration have differing objectives and thus requirements – could landlord participation / engagement be incentivised To what extent should Landlord Registration take account of the management of properties - need for a letting code? Just how will PRS meet energy efficiency objectives?

Smarter regulation and enforcement regime What role enforcement? Need for a speedy and cost-effective dispute resolution mechanism: for tenants, landlords & local authorities Detail barriers to achieving satisfactory redress through the Courts Is there a role for specialist Housing Court / Tribunal or dispute resolution / mediation body?

Smarter regulation and enforcement regime Enforcement : Agreed approach What issues should and should not be considered by any enforcement body? that then helps shape the structure / type of body – consider Gill Report, Consumer Focus / Civil Justice Advisory Group Report – consider outcomes for both tenancy deposits and the Factors Act need to be considered. – examine models of good practice from UK and other jurisdictions Identify and invite further information / evidence from relevant experts. Other related concerns – unlawful evictions, recovery of possession in abandonment cases and local authorities’ recovery of Court costs

Demographics, Markets and Housing Needs Analysis What are the national and local demographic factors that could have a bearing on future demand for the PRS? Need to better understand the market ‘drivers’ operating in the sector, so better able to predict its responsiveness to changing market and regulatory conditions – Core relationship with the first-time buyers market, and how the lack of mortgage finance impacts on future demand / supply in the PRS / BtL – Impact of UK Government policies such as the LHA changes for Housing Benefit – increase demand for more shared accommodation / HMOs – Current tax regimes, a lack of fiscal incentives and other national Government policies may act to restrict institutional / individual investment in the sector – Long term challenge of securing institutional investment given, above historic and current constraints – Potential impact of new providers, given SG growth expectations

Demographics, Markets and Housing Needs Analysis How does the current short assured tenancy arrangements influence: a) landlords and tenant costs; b) market demand? – does the SAT ensure a perception that the PRS is solely a short- term housing option? How does the current Local Housing Strategy process engage with these dynamics? – how are PRS interests currently consulted? – Housing Needs Analysis of the sector at both national / regional scale should emerge out of the above focus through appropriate analysis at both these scales Need also to better understand how homelessness currently engages with the PRS and how the PRS can help provide a solution

Demographics, Markets and Housing Needs Analysis Markets: Agreed approach Identify policies at UK level which may be having a negative impact upon growth – Fiscal regime, welfare policy changes Identify policies at Scottish level which may be having a negative impact upon growth – HMO / planning link, adverse community reaction, mixed policy messages as to national / local priorities, current ‘weak’ PRS structure Look at Housing Needs Analysis & how it currently engages with the PRS, and how local studies are combined to provide regional / national patterns – does Local Housing Strategies guidance embrace the PRS? Need to better understanding why so many homelessness presentations come from the PRS, and how this can be addressed

Policy direction – changing or challenging the PRS? “We will take steps to generate new growth within the PRS… we will support housing associations which wish to provide market rental homes as well as intermediate and social lets, where necessary through a subsidiary. By 2014, we want to see many more housing associations and co-operatives involved in this way”. Homes Fit for the 21 st Century

Our focus Group will provide a view on how to achieve a ‘smart’ regulation and enforcement regime Group will advise how this will empower consumers, while at the same time ensuring appropriate sector regulation and enforcement Group will advise how best government can help in addressing the challenge of securing future investment and growth