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We have to continue to engage with the universities around the obligations that they have to look after the students that they choose to attract, whether those are domestic or overseas students.

We took the view that the specific measures in the emergency legislation in relation to the purpose-built student accommodation market were not having a significant effect, because the scope for in-tenancy rent increases was negligible to non-existent. Although the intention to achieve parity of protection was always there, we had to take the view that the specific measures on the rent cap in the purpose-built student accommodation sector were not having that effect, so that has been suspended.

In relation to the wider arguments, we have long acknowledged that there are deeper issues to explore in relation to student accommodation. That is why we have the current review. The members of the steering group for that have been working hard, and the review is nearing completion. We expect the steering group to make its recommendations to ministers, and at the appropriate time we will report to Parliament and give our response.

Mr Hepburn—the minister who is responsible for the higher and further education side—and I will continue to engage with each other across Government and with the education sector around those issues.

Miles Briggs also mentioned homelessness. If we look at the tenures from which homelessness referrals come, there has been an extended period of a number of years in which the private rented sector has been a significantly higher source of homelessness than other tenures. That reduced significantly during the period of the emergency legislation for Covid, but there has been a continual rise and, before the introduction of this emergency legislation, it was exceeding its pre-Covid levels.

That increase has not been seen in other tenures, so we have an issue in relation to eviction from the private rented sector as a source of homelessness. That is another reason why we believe that the measures—particularly those on protection from eviction—remain necessary.

No. We have covered the main arguments that needed to be made.

I appreciate that the full titles of the instruments are a bit of a mouthful. I am pleased to be at the committee to present on the Cost of Living (Tenant Protection) (Scotland) Act 2023 (Early Expiry and Suspension of Provisions) Regulations 2023—sorry, there was a typo in my brief; that was the 2022 act—and the draft Cost of Living (Tenant Protection) (Scotland) Act 2022 (Amendment of Expiry Dates and Rent Cap Modification) Regulations 2023.

The convener and committee members will remember that the emergency act that we introduced last year had three key aims: to protect tenants, stabilising their housing costs by freezing rents; to reduce the impact of eviction and homelessness through a moratorium on evictions; and to avoid tenants being evicted from the rented sector by landlords who wanted to raise rents between tenancies during the temporary measures, reducing the number of unlawful evictions. The act came into force on 28 October. Since then, it has provided additional protection for tenants across the rented sector as we continue to live through these challenging and uncertain economic times.

Last month, we published our first report on the operation of the emergency legislation, which covers the period from when it came into force in October until the end of December. In that report, in line with the act’s requirements, we set out our intended position for the social rented sector rent cap after March 2023. That is the main focus of one of the instruments that is before you.

Scotland has led, and continues to lead, the way across the United Kingdom in the delivery of affordable housing, having delivered more than 115,000 affordable homes since 2007, and we have equally ambitious targets over the next decade. We also lead the way in the UK on our decision to end the right to buy in order to ensure that we retain social rented homes for people who are in the greatest need.

Our commitment to affordable housing is second to none, which is why we have placed so much emphasis on enabling continued investment in the delivery of high-quality social housing. During the passage of the Cost of Living (Tenant Protection) (Scotland) Bill through the Parliament, concerns were raised by members from across the chamber about the impact that a continued zero per cent rent freeze could have on that investment; indeed, some members of the committee who are here today expressed those concerns. However, due to the unprecedented economic circumstances at the time, we felt that it was imperative that all tenants living in the rented sector be afforded the protection that the emergency measures provide.

We agreed to work closely with social sector landlords and, by the time that the bill completed its passage through the Parliament, we had already established a short-life task and finish group to support that work. The group, which comprised a number of key social sector landlord representative groups including the Convention of Scottish Local Authorities, the Scottish Federation of Housing Associations and the Glasgow and West of Scotland Forum of Housing Associations, stressed the fine balance between affordability and investment, and stressed the need to set our social sector rents at levels that would ensure the continuation of essential work such as new build programmes and work towards energy efficiency and carbon neutral targets.

The group reached an agreement that would result in increases of 6.4 per cent in respect of local authority social housing and 6.1 per cent for housing associations as an average across Scotland. It is important to note that the agreement of an average figure is essential to allow some degree of flexibility. The majority of rents will be increased at levels below the agreed 6.4 and 6.1 per cent figures, but there might be some landlords who will, for specific reasons, need to go beyond those levels.

In the light of that agreement, the draft Cost of Living (Tenant Protection) (Scotland) Act 2022 (Amendment of Expiry Dates and Rent Cap Modification) Regulations 2023 and the Cost of Living (Tenant Protection) (Scotland) Act 2022 (Early Expiry and Suspension of Provisions) Regulations 2023 expired the rent cap for the social sector from 26 February, enabling social landlords to set rent levels that they judge, in the light of tenant feedback, to strike a balance on supporting repairs and maintenance, working towards meeting carbon neutral targets and continuing to provide the wide range of support that they offer every day to their tenants in times of such pressure.

The regulations also make changes to the rent cap for the student accommodation sector. As laid out in the first report, feedback from stakeholders demonstrated that the rent cap was having no impact on the student accommodation sector, in contrast to the mainstream private rented sector. That was because the nature of the majority of contractual student tenancy agreements means that rents are set annually, tenancies typically last for the entire academic year and they rarely, if at all, allow for in-tenancy rent increases.

In the light of that feedback, and in recognition that student accommodation tenancies are structured differently from other types of tenancies, we concluded that the rent cap should be suspended from 30 March, which is what the two sets of regulations seek to do. However, I make it clear that, by suspending the student accommodation rent cap instead of expiring it, ministers will continue to monitor the sector, and they have powers to revive the provisions if fresh evidence shows that there would be benefit from doing so to deliver a necessary and proportionate response to the cost of living.

I turn now to the affirmative instrument that the committee is considering today. Soon after we published our first report to the Parliament, we laid the draft Cost of Living (Tenant Protection) (Scotland) Act 2022 (Amendment of Expiry Dates and Rent Cap Modification) Regulations 2023, along with a statement of reasons. In addition to the first report on the 2022 act, which was laid before the Parliament on 12 January, the statement of reasons sets out updated data and economic analysis that shows that the unprecedented economic position has not yet changed fundamentally and that many households in the private rented sector in particular continue to struggle.

Yesterday’s announcement by the Office of Gas and Electricity Markets on energy price caps from April this year will bring no consolation, despite the decreases, as the UK Government measures mean that the average domestic energy bill will still increase from £2,500 to £3,000, at the same time as the £400 energy bill support scheme is ended, which will drive up fuel poverty to more than 50 per cent in the private rented sector. For that reason, the draft Cost of Living (Tenant Protection) (Scotland) Act 2022 (Amendment of Expiry Dates and Rent Cap Modification) Regulations 2023 seek to extend the rent cap measures for the private rented sector for a further six-month period to 30 September, as well as the eviction moratorium provisions across all rented sectors covered by the 2022 act, and the other important provisions in the act.

On the continuation of the private sector rent cap measures, although the focus continues, of course, to be on protecting tenants, we recognise the on-going impacts that the cost crisis might be having on some private landlords. That is why the regulations propose that the rent cap be varied to allow for in-tenancy rent increases of up to 3 per cent.

The voluntary approach to rent setting that is taken by landlords in the social sector is intended to equate to an approximate average rental increase of less than £5 per week across the country. As rents in the private rented sector are generally significantly higher, allowing for a maximum 3 per cent rent increase equates to a similar average rent increase for tenants in a two-bedroom property, which is the most common property size in the private rented sector. We consider that that gives a measure of parity in monetary terms while continuing to protect tenants from unaffordable rent increases. There is also a safeguard for private landlords, who can opt to apply to rent service Scotland for a rent increase of up to 6 per cent if they have an increase in their defined prescribed property costs within a specified period.

On the proposed continuation of the eviction moratorium provisions, tenants in the private and social rented sectors as well as those living in student accommodation will continue to benefit from the additional time to find alternative accommodation that is provided by the six-month pause in the enforcement of eviction action. In addition, they are protected from private landlords seeking to end a tenancy to raise rents above the cap, and there is provision to reduce the number of unlawful evictions by increasing the level of damages payable.

As with the rent cap, the eviction moratorium provisions include a number of safeguards for landlords and recognise that there are some circumstances in which enforcement of an eviction order or decree should be able to proceed—for example, it could be done to protect communities in instances of serious antisocial behaviour. The provisions strike the appropriate balance between the protection of tenants and the rights of landlords.

In summary, we believe that the evidence that the cost crisis is still very much with us shows that it is crucial to continue beyond 30 March some of the protections that were brought in by the 2022 act. As promised during the bill’s passage through the Parliament, we have kept the measures under review and continue to consider their on-going necessity and proportionality. We have used our powers to make changes to the act where the evidence has shown that measures were required, and that is what the two sets of regulations that are before the committee seek to achieve.

Thank you, convener, for giving me the time to introduce the measures. I thank the committee for its scrutiny and look forward to members’ questions.

Absolutely. The commitment to social housing from the Scottish Government remains very strong. There has always been an understanding that the targets for new provision in the current decade are likely to be backloaded to some extent, and the impact of construction costs is affecting that, too. We will continue to commit to work with the social rented sector to understand not just the impact that the legislation might have had and might continue to have, but the wider necessity to provide the high-quality, net zero and sufficient social housing that Scotland needs.

That is a very good question. We acknowledge that, given the nature of mid-market rent, there are differences not only in rent levels, but in what is included in the rent. For example, there are issues in relation to service charges.

Although we took the view in relation to the emergency legislation that mid-market rent properties tend to be private residential tenancies and would be treated as such in the act, we recognise that there are longer-term issues to work through before we introduce the new bill and get to a national system of rent controls. We are keen to engage with the social rented sector to understand people’s concerns about that and identify the appropriate way to address them.

We debated that issue and I reflected on it during our debates on the bill. We weighed up various factors while trying to reach an approach on rent arrears. In my opinion, tenants in very severe rent arrears need support so that they do not become stuck where they are, building up ever more rent arrears. They need support through the tenant grant fund and from other forms of financial support and they need to be able to work constructively with their landlords to resolve the reasons why they are in rent arrears, so that they can work out the best way forward.

We think that the approach that we took in setting that level of severe rent arrears gives appropriate protection without leaving people stuck where they are and building up ever more unaffordable rent arrears. If arrears reach a level of severity that is significantly beyond what we have currently set out, they will be extremely destructive and disruptive to a person’s circumstances. Whether they stay where they are or move to another property, those debts will become a burden that we believe is unreasonable. The type of protection that people who are facing those arrears need is not simply for us to say that they should stay where they are and see the arrears grow ever higher.

As I think that we discussed with a number of members in the debates in the Parliament during the bill’s passage, there are connections between the emergency measures in the act and the Government’s longer-term work through the new deal for tenants and the commitment to a new housing bill later this year.

However, although there were strong expectations of the emergency legislation, which delivered important necessary protection, it could not deliver everything that people wanted from longer-term legislative reform, particularly the protections around rent levels, which relate to in-tenancy rent increases and do not apply to the setting of rents for new tenancies. That issue is well understood through the debates on the legislation that we have had.

Longer-term work on rent controls is on-going. We are keen to engage with the sector, by which I mean landlords and tenant interests, as well as academics who can bring expertise on the way in which the housing rental market works. We are doing that work in line with our commitment to the ethos that is set out in “Housing to 2040”, which is that the right to adequate housing is a human right. We will have a great deal more to say on that in due course.

The principal bridging mechanism between the emergency legislation and our longer-term work is the power to alter the system of rent adjudication. If we were to move directly from the emergency measures by switching them off entirely at some point in the future and go back to open market comparisons for rent adjudication, there would be severe and unintended consequences. Therefore, in due course, we will announce proposals on how we intend to use those powers in the act.

A longer-term argument can obviously be had—it has played out in the chamber on a couple of occasions—about whether a regulated approach to private renting is compatible with continued investment. Our view, which is also acknowledged in the report on rent control by the cross-party group on housing, is that regulated markets can be attractive to investors. Indeed, we regularly make that case in relation to the long term.

If we consider the history of the devolved approach to housing, for example, we have seen a very substantial increase in the size of the private rented sector at the same time as continued improvements in the robustness of regulation. We therefore do not believe that there is a fundamental contradiction between having a well-regulated sector that strikes appropriate balances for tenants’ rights and continued investment in the sector.

On current data, it is more of an administrative than a statistical source, but the Scottish landlord registration scheme shows that 340,149 private rented properties were registered in Scotland in December 2022, which is slightly more than the 339,632 that were registered in August, before the introduction of the rent cap. I was told just yesterday that we have now seen the figures for January, which are roughly the same—they are still very slightly, albeit not significantly, up on the August figure.

Of course, there will be those who suggest that there is an intention among landlords to leave the private rented sector at some future point. It is fair to say that we hear that in Scotland as well as south of the border. Some of the push factors there have involved tax changes that the UK Government has pursued, which impact on landlords’ profitability throughout the UK. There are severe challenges in the housing system throughout the UK, and severe challenges to affordability. We believe that it is necessary and achievable to strike the right balance between protecting tenants in relation to affordability through regulation and ensuring that we have continued investment in housing supply.

As I said in my opening remarks and reinforced to the convener, we believe that we have struck a balance that achieves a degree of parity. Private rented sector rents are significantly higher than social rented sector rents. A 3 per cent increase in the private rented sector is broadly equivalent to an impact of £5 a week—or thereabouts—in the social rented sector, if we look at the most common property type, which is the two-bedroom property. Obviously, there will be slight variations for one-bedroom, three-bedroom and four-bedroom properties, because we cannot apply that average at a uniform level. We would need to control each rent individually to achieve that, but setting that 3 per cent cap achieves something that is broadly in parity in monetary terms.

I reinforce the point that the additional safeguard for landlords is there. If they face additional prescribed property costs during the specified period, they can apply for an increase of up to 6 per cent through Rent Service Scotland. I think that that strikes the appropriate balance between tenants and landlords, who will in a significant number of cases face significant challenges through the cost of living crisis.

On average, tenants in the private rented sector tend to have lower incomes than those in other tenures. They tend to spend a higher proportion of their income on their rent and are facing a number of other challenges. We believe that the legislation strikes the appropriate balance, going forward.