Shelter praises Scotland’s new indefinite rental contracts

Michael Lloyd

June 17, 2019

Early signs are positive about Scotland’s new indefinite rental contracts, a report from homelessness charity Shelter has said.

In December 2017, the Scottish government ended ‘no-fault’ evictions and introduced indefinite tenancies for private tenants. Then in April, Theresa May’s government announced its intention to end no-fault evictions and effectively introduce open-ended tenancies by scrapping Section 21.

The report, entitled ‘The New Private Rental Tenancies: Evaluating changes to rental agreements in Scotland’, read: “Overall, although very early days, the signs point to a positive change for renters in Scotland, and the sector more generally.”

A summary of it said: “In much the same way as abolishing no-fault evictions is changing the experience of renting in Scotland, the abolition of Section 21 in England would be the most significant change to private rented legislation in a generation.

“This reform is long overdue and presents a genuine opportunity to strengthen renters’ rights and make the private rented sector fairer and fit for purpose.”

The majority of renters on the new contracts in Scotland were less worried about becoming homeless, felt less locked into their tenancy and had stronger faith in politicians.

Renters on the new tenancy were half as likely to say they ‘worry about becoming homeless’ as those on the old tenancy, 15% compared to 29%.

Renters on the new tenancy were half as likely to agree ‘I feel that I am locked-in to my rental contract and cannot move when I want to’, 8% down from 16%. And renters on the new contracts were less than half as likely to strongly agree that ‘politicians in Scotland don’t care about renters’.

However, only half of renters in Scotland (49%) were aware of the new tenancy agreements and three in 10 did not know whether they are on a new or old-style agreement.

Answers given to questions on moving in dates and contract renewals suggested that about half of the sample are on a new indefinite tenancy, but a substantial number of renters are not clear on this themselves.

The report added that the implementation of the new private rental tenancy agreements in Scotland is still at an early stage, asaround half of Scotland’s renters are now on the agreements and many will have only recently switched over.

It read: “Notwithstanding the need to exercise caution in forming firm conclusions, the official statistics in this report strongly suggest that the worst predictions about the new tenancies – that they would cause a collapse in supply which would consequently inflate rents and create more homelessness, have not occurred.

“The primary survey research suggests that some of the mooted benefits of the new tenancies are emerging, with renters in Scotland on the new tenancies appearing to feel more secure and less anxious over becoming homeless.

“The new tenancies are not making renters feel locked in, and the politicians and campaigners behind the changes are viewed in a more positive light. The main problem identified in this study is the lack of awareness and clarity among renters about whether they are on the new or old terms.

“This is likely to improve as the implementation process continues and renters and landlords become more familiar with the new agreements, but may also require further investment in information and advertising campaigns.”

However, David Smith, policy director for the Residential Landlords Association, said Shelter fails to recognise key differences between England and Scotland.

He said: “The only reason the Scottish model has worked is because a properly funded and staffed housing court was established to cope with the dramatic increase in repossession cases needing to be heard.

“Across England and Wales it takes an average of over five months for landlords to repossess properties through the courts. This is not good enough.

“We call on Shelter to back the RLA’s plans for a dedicated housing court that can process repossession claims in legitimate circumstances without frustrating landlords. Simply tinkering with the existing courts will not work.

“It is also disappointing that in arguing that changes in Scotland have not affected the supply of homes for rent, Shelter has used figures from before the changes were introduced.

“As the latest data from the Royal Institution for Chartered Surveyors notes clearly, whilst the demand for new homes to rent has increased considerably in Scotland, new landlord instructions have fallen, providing less choice for tenants.”

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