Through the roof
A Scottish Review investigation
Part I

The scandal of 'fair rents'

Kenneth Roy

On 22 June, an official deputation visited a tiny tenement flat in the Partick district of Glasgow. Three members of the Private Rented Housing Panel, a tribunal appointed and paid for by the Scottish Government, accompanied by a clerk to the panel, climbed three floors to the home of Ms R in Gardner Street. They inspected the property – part of a block built in 1887 – and found that it consisted of a living room, a bedroom, a kitchen, and a 'dark' bathroom.
     For this modest accommodation, Ms R paid a rent of £2,191.20 a year. Her landlord, Partick Housing Association, a charity which 'believes in people's potential to improve their circumstances', had applied for a new rent of £2,771.52 a year – an increase of 26%. The local rent officer decided that the 'fair rent' (the official terminology) for Ms R's flat was £2,652 – an increase of 21%.
     The tenant, dissatisfied with both the landlord's new rent and the rent officer's lower figure, appealed to the Private Rented Housing Panel. Created out of the former Rent Assessment Committee for Scotland, which was set up to protect tenants from exploitation by private landlords, prhp (as it styles itself) claims that it works to ensure fair rents. Shelter, the homeless charity, goes further and asserts that the panel 'sets reasonable rents [for tenants]...the committee is not on anyone's side'.
     This may indeed have been Ms R's understanding when the three members of the panel, a Mr Handley, a Mr Links and a Mr Campbell, accompanied by the clerk, a Mr Shea, entered her flat to inspect it. We do not know much about any of these people, since (as the Scottish Review has already pointed out) prhp fails to publish on its website a list of its members or secretariat; and fails to upload its annual report, although it has been promising to do so for some time. It is understood that its current president is Isabel Montgomery, a solicitor, that she receives £20,568 a year from public funds for this part-time appointment and that there are 37 other members, all of whom are paid.
     On 22 June, a Ms Donnelly attended on behalf of Partick Housing Association. Present, then, were four representatives of the panel, a representative of the landlord, and the tenant herself, all crowded into Ms R's living room. As soon as the inspection of the property was over, the hearing of Ms R's case began: not, as prhp claims is its normal practice, at a venue open to the public, but in the privacy of the tenant's flat.
     The committee decided that the 'fair rent' in Ms R's case was £4,500 a year – an increase of 105%. This was £1,848 a year more than the rent officer had decided was the fair rent and £1,728.48 more than the landlord was looking for.
     In another recent case involving Partick Housing Association, the landlord appealed against the rent officer's determination of £2,737.44 a year as the 'fair rent' for a 3-room tenement flat in Chancellor Street, Glasgow – an increase of 21%. The housing association wanted £2,846.40 – an increase of 26% – and referred the case to the Private Rented Housing Panel for arbitration. The panel decided that the 'fair rent' was not £2,737.44 as the rent officer had judged, but £5,100 – an increase of 126%.
     Yesterday morning, I emailed Partick Housing Association and asked for its opinion of these cases. I have not received a reply.

It would be wrong to assume that the Partick cases are exceptional. In cases of appeal to the secretive, taxpayer-funded Private Rented Housing Panel, the organisation that according to Shelter is 'not on anyone's side', colossal rent increases are now the norm.
     On 22 July, a prhp panel consisting of a Mrs Devanny and the same Messrs Links and Campbell inspected a 2-room flat in Argyle Street, Glasgow, owned by another charity, Glasgow West Housing Association. The tenant was paying £2,307 a year. The rent officer set a rent of £2,707 – only £132 less than the landlords were demanding, but enough to trigger a landlord referral to prhp. The tenant argued that the landlord, as a charitable organisation, should not be charging rents at the same level as commercial landlords, but the Scottish Government-appointed panel went on to set a rent of £4,200 – an increase of 82% – £1,400 a year more than the charity had proposed in the first place.
     Unlike Partick, this housing association proved helpful when I approached it. Its spokeswoman said that in such cases it restricted the increase in the first year, but that the tenant was required to meet the full increase in year 2.
     These examples are part of a disturbing pattern. Of the 17 most recent cases of regulated tenancies determined by the Private Rented Housing Panel, the panel has fixed a rent higher than the rent officer's in all but one of them. In that solitary case, the panel and the rent officer arrived at the same rent. Why is there generally such a significant discrepancy – almost always damaging to the tenant's interests – between the judgement of the local rent officer and that of the national panel? Glasgow West Housing Association says it has raised this question but is still none the wiser.
     
I have studied the Rent (Scotland) Act – the legislation on which a 'fair rent' must be based. The law places an identical obligation on local rent officers and the panel. It is to 'apply knowledge and experience of current rents of comparable property in the area, as well as having regard to the age, character and locality of the dwelling-house in question and to its state of repair'. In theory, then, the rent officer and the panel should be using the same yardstick to arrive at broadly the same conclusion. The results, however, are startlingly different. Unless there is a profound disagreement about local rental values, we are left to conclude that the rent officer deducts more than the panel for the condition of the properties and their locality.
     prhp's website, although uninformative about its key personnel to a degree unique in any public website I have ever visited, presents a user-friendly facade to the world. It uses photographs of models of varying ages, classes and ethnicities to play the roles of landlord and tenant, but there is a factor common to all these symbolic figures – the look of contentment and satisfaction on every face. Undeniably, the landlords have every reason to be happy, since they benefit handsomely, sometimes almost incredibly so, from prhp hearings. The tenants, on the other hand, must surely be distressed, as well as financially devastated, by their experience with prhp. Why the models playing them look so pleased on the website, only the panel can say.
     If you were a tenant, and in full knowledge of the track record of the Private Rented Housing Panel, you would have to be certifiably mad to put your future in the hands of this organisation. Yet people in good faith continue to do so. I do not believe for a moment that these people are certifiably mad; merely that they are uninformed of the dangers. They should be made aware of these dangers. Fortunately, the number of cases referred to the panel is small: but the message it is sending to private landlords, with the authority of the Scottish Government, is unmistakable. A public body with an honourable history of helping the poor has set an average rent increase in the last quarter of 71%.