A research project funded by the Nationwide Foundation has revealed widespread tenant satisfaction with small-scale landlords in Scotland.
The project, RentBetter, looks at how recent significant reforms to the Scottish private rental sector - including much longer notice periods and stronger tenant rights - have impacted in the country, including a reduced churn amongst renters.
“This finding might suggest a higher degree of consumer satisfaction in private renting than is often supposed” says one of the report authors, Professor Douglas Robertson.
“This was also found to be linked to the landlord type, with what many considered the small-scale, more amateur, so-called ‘cottage industry’ providers. The finding jars somewhat with another policy ambition, that of encouraging a higher degree of professionalism across the sector.”
However, he says despite a stronger tenant-landlord bond north of the border than we have seen elsewhere in the UK, the report identifies substantial dissatisfaction amongst landlords hit by Scottish tax changes.
“One worry that arises out from this is who exactly is thinking of getting out. If it is the small amateur landlords, then policy will have delivered on professionalising the sector, but for many tenants it is these very same landlords who they have invested so much faith in” says Robertson.
Here are the seven recommendations for further changes in the Scottish private rental system advocated by the report.
1. More work is needed, led by the Scottish Government and involving wider advisory stakeholders, to raise awareness of tenancy rights as a starting point to empower tenants and increase their access to justice. This may include some targeted work for those private tenants with less financial power – those on lower incomes and housing benefit – who feel less security of tenure than private tenants generally.
2. The Scottish Government may wish to consider the early findings on the combined negative impact of the open-ended tenancy and the reduced 28-day notice period which is argued by landlords and letting agents to be causing increased turnover, although it gives tenants greater flexibility. Other negative impacts that merit early consideration are the Ground 12 timescales and the difficulties around the joint tenancy aspects of the PRT.
3. While not a focus of this research, challenges reported by landlords around the practical implications of the PRT in the student market should be explored further by the Scottish Government.
4. There are challenges relating to rent data to enable accurate assessment of rent increases and affordability. However, given overall findings so far, the Scottish Government should consider commissioning further work to fully explore the limitations of the Rent Pressure Zones mechanism, and how this can be improved to tackle excessive rent increases where these occur in specific markets.
5. There is scope for the Scottish Government, with training and advisory bodies, to support landlords and letting agents to better understand and navigate the benefits system. This could help support more lower income tenants in the PRS, and help landlords miti gate any real, or perceived financial risks in this part of the market.
6. The Scottish Government and the Scottish Courts and Tribunal Service, alongside advisory agencies and local authorities should work together to raise awareness amongst tenants about the Tribunal system as a formal route to justice. In addition, there should be consideration from these stakeholders on the development of media on services to fill a gap between informal and formal tenant landlord dispute resolution, which might better meet tenants’ needs compared to the formal Tribunal route.
7. Should consider the early lessons learned at baseline stage and recommendations listed above. In particular, stakeholders should note the lack of concern (so far) in the loss of the ‘no-fault’ ground amongst the majority landlords/letting agents participating in this research.