Approaching the cliff edge? The intentions of private sector landlords on cessation of the eviction ban in Scotland.

Lead Research Organisation: University of Glasgow
Department Name: School of Social & Political Sciences

Abstract

Summary

The Private Rented Sector has grown considerably over the last 25 years and is now a crucial part of the UK's housing mix. The sector provides easily accessible accommodation for young, mobile, transient populations, but is increasingly being used to provide long term accommodation for vulnerable groups who in earlier times might have been able to access local authority or housing association accommodation.

With the arrival of Covid, The Scottish Government made a series of temporary changes to the legislation that governs the tenant eviction process. These changes have been made over concerns that Covid-19 would result in an increase in evictions resulting in tenants being made homeless and support services being overwhelmed. The changes include extensions to notice periods (up to 6 months) for certain grounds, the introduction of 'Pre-action requirements', and the re-classification of all grounds as discretionary. Importantly the changes also include a ban on evictions due to tenant non-payment, until the end of September 2021. The amendments apply to all areas under a Tier 3 or Tier 4 lockdown.

Whilst these changes are believed to have safeguarded tenants and support services in the short term, they have not addressed the underlying problems, and unprecedented levels of rent arrears have accumulated for private landlords. Every additional month of arrears increases tenant debt levels and further reduces landlord income. In many cases landlords rely on this income to support their living expenses or service a mortgage. The changes are only temporary and there is great concern as to what will happen when the ban is lifted. Some believe that there will be no markable increase in the number of evictions, others belief that there will be a significant increase leading to many tenants being made homeless. While the truth is likely to be somewhere in between, policy makers, service providers and charities urgently need a more detailed understanding of what is likely to happen, to allow them to create policies that minimise the impacts of the ban when it comes to an end. To obtain this understanding we need to identify the extent of the problem as it stands, specifically, how many landlords have arrears and how large are the arrears? We also need to gain insights into how landlords are currently dealing with arrears, to identify how familiar landlords are with the temporary changes in legislation, and to ascertain whether the support currently available, such a loan schemes, is fit for purpose. Insight into the resilience of landlords and identification of the tipping points that may result in an increase in evictions is also necessary, as is the identification of landlord intentions following the cessation of the ban.

Unfortunately, we do not currently know the answers to these questions. In fact, we know very little about the behaviours or intentions of landlords in general. This research therefore aims to answer these questions by undertaking primary research with the support of landlords.

The research will take the form of a quantitatively focused online questionnaire, which will be issued to a large population of Scottish Private Rented Sector (SPRS) landlords via our project partner SafeDeposits Scotland. The responses from the survey will be analysed and findings generated. The findings will then be shared directly with Government, Parliament, Service Providers and Third Sector organisations. To maximise impact and reach, the findings will be also be made available through a series of blogs and tweets.

The entire research process from survey design to the dissemination of the findings will take just 4 months. This accelerated program is required to allow those receiving the data sufficient time to digest the findings and generate appropriate policies in response.

Publications

10 25 50
 
Description We provided original evidence on the scale of the pandemic arrears crisis in Scotland and on landlord intentions in relation to these. Our research concludes that the temporary COVID-19 legislation has protected public services and the most vulnerable during the worst of the pandemic, as intended. However, it did so largely at the expense of private landlords. We make a number of recommendations designed to safeguard tenants and ensure resilience of supply. The work has therefore supported a more informed debate around public policy responses to the pandemic arrears crisis. Key findings are summarised below.

Around 45,000 landlords in Scotland faced rental arrears totalling up to £126million. On the tenant side, this equates to roughly 13% of the 340,000 households living in PRS accommodation in Scotland. The majority of these landlords had tried to engage with tenants over current arrears and just over half (55%) said that they had managed to agree an interim payment plan with their tenants. However, only just over half of tenants had adhered to the payment plan. While many landlords intended to recoup these arrears, most accepted that there would be unlikely to be able to do so.

With regards the risk of evictions, we found that the majority of landlords were either not in a position to take eviction action or had elected not to do so. Viewed in terms of the percentage of tenancies in current arrears, over two thirds of tenancies were not at risk. It is clear that there is process inertia due to landlord reluctance, but also process lag caused by the temporary legislation.

The temporary legislation inherently assumed that landlords would be able to sustain an increase in arrears. However, we found that one in five landlords described their PRS income as their primary income and classified it as critical. One in three landlords with arrears rated the impact on their personal finances at 8 out of 10 or higher. In total, 6% of landlords reported that they had already reached a financial tipping point, and a further third could only sustain a further 3 months of rent arrears before being placed into financial difficulty. Many had depleted savings (41%) and/or take on debt as a direct result of the legislation.

The majority of landlords felt that the temporary legislation was necessary to safeguard tenants and protect public services. However, only a minority felt that the temporary legislation was fair and balanced. Many believed that both the legislation and policy makers were biased against them, others felt that policy makers did not fully understand the sector, and suggested that the legislation was based on erroneous assumptions regarding landlords, particularly with regards their financial resilience.

Our recommendations included the following changes to the temporary legislation; the cessation of extended notice periods; the temporary extension of discretionary notice periods; and the permanent extension of the pre-action requirements. These recommendations were reflected in the subsequent actions taken by the Scottish Government.
Exploitation Route The research was focused on delivering short term impacts. However, it presents a number of opportunities for future development:

1. Repeat the Survey

The survey provided a snapshot of the level of arrears and landlord intentions as of July 2021. As the situation continues to develop, it is recommended that the survey is repeated in July 2022 to allow progress to be monitored and recommendations updated if necessary.

2. Areas Requiring Further Research

Our report points to a number of areas for further research. For example, we noted an urgent need to better understand the quantum and impact of pandemic-related void periods within the sector. Furthermore, although we have made tentative steps into understanding landlord resilience levels, this is an understudied area that would benefit from increased academic focus. Finally, the research points to the need to more fully understand the behaviours of landlords and tenants within the sector, particularly in terms of investment and debt management behaviours.
Sectors Other

URL https://housingevidence.ac.uk/publications/the-pandemic-arrears-crisis/
 
Description One area of impact is by providing new evidence to public and policy debates about the scale and nature of the pandemic arrears crisis. Our report did so, attracting significant print and electronic media attention, including coverage in The Herald, Daily Record, Sunday Mail, Scottish Housing News and Citylets News. The report was also widely shared and reviewed on social media by sector professionals, and the findings were communicated to both sector professionals' and policy makers via video presentations at a UKRI Actionable Insights Seminar and the Scottish Housing Policy Conference. By focussing on the situation of landlords and on the sustainability of current arrears levels, the work provides a new perspective on the potential impacts of the arrear's crisis, notably on the future supply of PRS accommodation. Our findings were considered by policy makers during the creation of the Coronavirus (Recovery and Reform) (Scotland) Bill, and the author was subsequently asked to provide evidence to the Local Government, Housing and Planning Committee during scrutiny of the bill. The findings were also utilised by others, including the Scottish Parliament Information Centre (SPICE) who cited the findings in their briefing to parliamentarians, and the Scottish Association of Landlords (SAL) who used the data to inform their work and members. The findings have therefore contributed to policy debates, and it is hoped that the research will ultimately directly impact upon the practices of landlords and the lived experience of tenants within the sector. However, we continue to monitor policy outcomes in this area to establish what concrete impacts there have been on policy.
First Year Of Impact 2021
Sector Other
Impact Types Policy & public services

 
Description Local Government, Housing and Planning Committee- Coronavirus (Recovery and Reform) (Scotland) Bill Evidence Session, Tuesday 08 March 2022 9:30 AM
Geographic Reach Local/Municipal/Regional 
Policy Influence Type Participation in a advisory committee
Impact Our research contributed to an improved regulatory environment. It did so by recommending changes to the temporary legislation enacted in response to COVID-19. In particular, we recommended the cessation of extended notice periods, the temporary extension of discretionary notice periods, and the permanent extension of the pre-action requirements. These recommendations were reflected in the subsequent actions taken by the Scottish Government. The Cabinet Secretary for Social Justice, Housing and Local Government noted that our research report was: "an invaluable addition to the evidence base in assessing the effectiveness of the temporary measures brought in to deal with the pandemic, and to inform our thinking for future policy making."
 
Title The pandemic arrears crisis: Private landlord survey data 
Description The dataset includes a range of documents associated with the project as well as raw data from the online survey. 
Type Of Material Database/Collection of data 
Year Produced 2021 
Provided To Others? No  
Impact The dataset has recently been submitted to the UK Data Service Reshare system for review. It will be made available to others on completion of this review. 
 
Description Blog Publication Via The UK Collaborative Centre for Housing Evidence (CaCHE) 
Form Of Engagement Activity Engagement focused website, blog or social media channel
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact A blog summarising the research findings was published via the UK Collaborative Centre for Housing Evidence (CaCHE) website. This allowed the research findings to be accessed by policy makers, third sector organisations, practitioners and the general public.
Year(s) Of Engagement Activity 2021
URL https://housingevidence.ac.uk/unwinding-the-pandemic-rent-arrears-crisis/
 
Description ESRC-GSR Actionable Insights Seminar Series Video Presentation 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact We were asked to present the actionable insights from our research via the ESRC-GSR Actionable Insights Seminar Series. This event is due to take place on the 17/03/2021.
Year(s) Of Engagement Activity 2022
 
Description Local Government, Housing and Planning Committee- Coronavirus (Recovery and Reform) (Scotland) Bill Evidence Session, Tuesday 08 March 2022 9:30 AM 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Policymakers/politicians
Results and Impact We were asked to attend the Local Government, Housing and Planning Committee to provide evidence regarding Part 4 of the Coronavirus (Recovery and Reform) (Scotland) Bill. The findings of the research were imparted to the panel during a series of questions relating to our recommendations, which were reflected in the bill.
Year(s) Of Engagement Activity 2022
URL https://www.scottishparliament.tv/meeting/local-government-housing-and-planning-committee-march-8-20...
 
Description Print Media Interview 
Form Of Engagement Activity A press release, press conference or response to a media enquiry/interview
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Public/other audiences
Results and Impact The publication of the research report generated an enquiry from the Scottish Daily Record and Sunday Mail for more information. This subsequently led to the project PI being interviewed and an article being published in the Daily Record. This article helped to raise awareness of the research findings beyond academic and policy making circles.
Year(s) Of Engagement Activity 2021
URL https://www.dailyrecord.co.uk/news/scottish-news/thousands-tenants-face-eviction-scotland-25453658
 
Description Print and Social Media Press Release 
Form Of Engagement Activity A press release, press conference or response to a media enquiry/interview
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Public/other audiences
Results and Impact The research report and accompanying blog were shared with print and online media outlets. This led to articles being published in the Glasgow Herald and Scottish Housing News. This action ensured engagement and raised awareness beyond academic and policy making circles.
Year(s) Of Engagement Activity 2021
URL https://www.heraldscotland.com/news/19716120.15-000-landlords-pursue-evictions-126-million-arrears/
 
Description Report Publication Via The Scottish Association of Landlords 
Form Of Engagement Activity Engagement focused website, blog or social media channel
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Professional Practitioners
Results and Impact The research report was shared via the Scottish Association of Landlords website, newsletter and magazine. This ensured that the report reached practitioners in the field.
Year(s) Of Engagement Activity 2021
URL https://scottishlandlords.com/news-and-campaigns/news/research-into-pandemic-rent-arrears-published/
 
Description Report Publication Via The UK Collaborative Centre for Housing Evidence (CaCHE) 
Form Of Engagement Activity Engagement focused website, blog or social media channel
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact The research culminated in a report which was published via the UK Collaborative Centre for Housing Evidence (CaCHE) website. This allowed the research findings to be accessed by policy makers, third sector organisations, practitioners and the general public.
Year(s) Of Engagement Activity 2021
URL https://housingevidence.ac.uk/publications/the-pandemic-arrears-crisis/
 
Description Scottish Housing Conference 2022 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact A video presentation summarising the research findings was made available to delegates during the Scottish Housing conference. The video stimulated debate on the potential impact of the temporary legislation upon supply within the sector.
Year(s) Of Engagement Activity 2022
 
Description Steering Group Findings Presentation 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Supporters
Results and Impact The findings of the research were presented to the research stakeholder advisory group. The group reported surprise at the scale of the challenges identified by the research.
Year(s) Of Engagement Activity 2021