REFERENCE OF EXCESSIVE RENTS TO RENT ASSESSMENT COMMITTEE (Hansard, 26 October 1988)

§ Lord James Douglas-Hamilton
I beg to move, That this House doth agree with the Lords in the said amendment.

§ Mr. Deputy Speaker
With this, it will be convenient to take Lords amendment No. 21.

§ Lord James Douglas-Hamilton
These amendments relate to a point that was first raised by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) when we discussed the Bill in Standing Committee. He was concerned that there were likely to be very few short assured tenancies in any one locality in rural areas in Scotland. In such circumstances, the rent assessment committee might be unable to make a determination of rent under clause 31 because of a lack of similar tenancies of similar houses.
We have taken on board that concern. These amendments make it clear that a rent committee determining the rent of a short assured tenancy should consider the rents of all assured tenancies, whether short or not, as evidence for the appropriate market level of rent. However, when reaching its determination, clearly the committee will bear in mind that rents for short assured tenancies will often be lower than those for ordinary assured tenancies. I hope that that change meets with the approval of the House.

§ Mr. Home Robertson
The only query that arises from the Minister's speech is that not very long ago he was saying that a short assured tenancy and an assured tenancy were one and the same thing, so far as concerned the provisions of the Bill. Now he is saying that there will have to be an amendment to establish that they are the same for the purposes of considerations by rent assessment committees. Perhaps the Minister will return to that point.
This extension of the scope of the rent assessment committee to compare a rent that is the subject of an appeal against other rents charged in the locality, which now includes those for all assured tenancies and not just short assured tenancies, is obviously a minor improvement and one that we accept. However, perhaps the Minister will take this opportunity to address himself to the fact that the market rent likely to be established through this process will almost certainly be considerably higher in many cases than that which many people would regard as being affordable. How will that gap be bridged?

§ Mr. Bill Walker
The hon. Member for East Lothian (Mr. Home Robertson) spoke of what is an affordable rent and what is a market rent. Obviously he does not realise that if a rent is set at a level that is not affordable, the property will not be let—and that would not be in the interests of landlords in the rural areas, of which he probably knows much more than I do, having himself been a landlord. The market will reflect the situation in whatever locality, and if landlords are determined to let their properties, they will fix rents at levels that people can afford.

Lord James Hamilton-Douglas
I repeat my earlier comment—that a short assured tenancy is a form of assured tenancy. The particular concerns voiced in Committee were to the effect that there would not be sufficient evidence available in respect of short assured tenancies. These amendments meet that point, and I agree with the comments of my hon. Friend the Member for Tayside, North (Mr. Walker).

§ Mr. McAllion
The Minister said that the rent assessment committee will only be able to operate on the basis that it will be able to compare the rents of similar short assured tenancies in the locality. What will happen in the early stages, when the Act is first applied, and when assured and short assured tenancies are first set up? Will tenants have no recourse to a rent assessment committee because there will be insufficient numbers of assured and short assured tenancies with which to compare their rents? How will a market rent be arrived at in those circumstances?

§ Lord James Douglas-Hamilton
I can only say to the hon. Member for Dundee, East (Mr. McAllion) that I have asked exactly the same question that he has just asked.

§ Mr. McAllion
Will the Minister tell the House if he got an answer?

§ Lord James Douglas-Hamilton
I certainly did get an answer, which was that there are plenty of evidence and precedents to give indications, and that there will be no shortage of expertise among those serving on rent assessment committees. We believe that it will not be a problem. The amendments go a long way to meeting the worries that were expressed.

§ Mr. McAllion
Will the Minister tell the House what evidence there is other than comparing other short assured and assured tenancy rents? What other evidence can be taken into consideration?

§ Mr. Home Robertson
Will it be the weather?

§ Lord James Douglas-Hamilton
Basically, the rent assessment committees will be well aware of market rents that have been fixed in comparable circumstances in Scotland. I have no doubt that they will take them into account.