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  4. Consultation on proposals for regulations and policy on the Private Housing (Tenancies) (Scotland) Act 2016

Consultation on proposals for regulations and policy on the Private Housing (Tenancies) (Scotland) Act 2016

Last updated: 13 Oct 2016

Consulting body:
Scottish Government
Status:
Closed
Period of consultation:
Runs from 13 October 2016 to 26 December 2016
CML action:
Response submitted

The Scottish Government has launched a consultation on proposals for regulations and policy supporting the Private Housing (Tenancies) (Scotland) Act 2016, which received Royal Assent in April.  The consultation runs until 26 December. 

The Private Housing (Tenancies) (Scotland) Act 2016 creates the new private residential tenancy which will replace current assured and short assured tenancies. The purpose of the new tenancy is to improve security of tenure for tenants balanced with appropriate safeguards for landlords, lenders and investors. 

Explanatory Notes to the Act are available to assist in understanding its provisions.

This consultation seeks views on the secondary legislation and further policy to support the new private residential tenancy, which will replace the short assured tenancy and assured tenancy for all future lets in Scotland. 

The consultation covers the following issues:

  • the content of all of the prescribed notices to be used by tenants and landlords under the new tenancy;
  • the content of the Scottish Government’s Recommended Model Tenancy Agreement;
  • whether there should there be an option of serving documents electronically, if a tenant and landlord agree this as the preferred method of communications; and
  • which terms should be ‘statutory terms’ (applicable to all private residential tenancies).

The new tenancy is expected to come into force in December 2017 and is part of the Government’s broader approach to reforming the private rented sector in Scotland, to make it a more professionally managed and better functioning sector, providing good quality homes.

The policy proposals in the consultation document are intended to be complimentary to the provisions in the 2016 Act.  Please note that the consultation is not about the principles or provisions of Act, which has been passed by the Scottish Parliament and will not change as a result of this consultation.

CML response

A lender's position in the new regime will be much the same as it is currently under the short assured tenancy regime. As such, the CML and lenders are broadly content with the proposals.

As government moves forward on implementation of the Act, we expect due regard will be taken by government to the following impacts of the new provisions for lenders:

  • Changes will be required to mortgage terms and conditions, which currently reference assured and short assured tenancies.
  • It is likely that lenders will need to make changes to their IT system and processes, to accommodate the new arrangements under the Act.
  • Similarly, lending policies will need to be amended, for example, those dealing with temporary grant of consent to let properties with residential mortgages
  • Changes such as these will be resource-intensive for lenders, at a time when other priorities might require more pressing attention. It is therefore important that these issues are considered and factored-in to the implementation timeline.

Government should also understand that implementation of the new provisions might make buy-to-let less attractive to investors generally.

In turn, this might result in a reduction in BTL mortgage applications in Scotland.

Read the full CML response below.