Rent cap law drives up Scottish rents to record highs

It seems to me that this was always predictable. If you penalise landlords you drive down supply or drive up rents as landlords recover the extra costs. Not only do tenants not benefit, they are actually being penalised by knee-jerk politicians who drive landlords out of the PRS or into other activities.

Coincidentally this week I also just got an email from Zoopla that says "Maximise your property returns with short-term rentals 94% of landlords say they’ve always wanted to try short-term rentals, but it seems too much work! That’s no longer true. We’ve designed Houst to make it easier for you to earn more whilst doing less. "

The reason that Zoopla are doing this is that *governments* have made putting a roof over a family's head unattractive for landlords via the tax system and by introducing policies that penalise both landlords and tenants.

The more that extreme left-wing governments like the SNP do to attack landlords in the PRS providing good quality, long-term accommodation the more they hurt tenants.

All the governments in the UK need to learn from the failed experiment in Scotland. Where's the incentive in the tax system to be a good landlord?

Reply to the comment left by Beaver at 18/08/2023 - 10:43
The problem with this is that the new legislation for Short Term Lets licensing makes the PRS look like a walk in the park. I'm giving up on both. Very sad for tenants, tourists and ordinary people just trying to make a modest living in a business that is in demand and manageable by most people of all abilities and modest means.

Reply to the comment left by Morag at 18/08/2023 - 11:19
I think that's why Zoopla has come up with whatever this Houst thing is (although I've not tried it and I've never done short-term lets). From the point of view of learning something from that email the statement to focus on in the e-mail is that statement saying "94% of landlords say they've always wanted to try short-term rentals". All of the various UK governments have made short-term lets financially more attractive and the worst offender in this area is the [SNP] government in Scotland with its rent controls that ultimately harm tenants.

If a good agent or some other service that can help you comply with whatever licensing scheme you have to comply with is well thought through the service provider will make money; and if the landlord has an easier time and lower risk it will succeed. I've no idea whether Houst is the answer but the reason these things are being developed is because there's a market opportunity for short-term lets *created by government policy*.

A while back I contributed to another discussion thread on this site about taking benefits tenants. I don't take benefits tenants (unless they pay me directly) because if it subsequently transpires that the tenant wasn't eligible for benefits then the authority can just come back and get the money back from you, the landlord, rather than doing the job it should be doing which is checking that the tenants are eligible for the benefits. As a landlord you have very limited powers to check a tenant's eligibility once the tenant is in residence.

A number of other contributors who did take benefits tenants contributed to the thread setting out what they had to do to try and make sure they got paid and weren't at risk of clawback....it was very complicated....and all of that extra work amounted to something a lot more complicated and risky for a landlord than any licensing scheme for short-term lets!

The various UK governments have deliberately made it unattractive for small landlords to house families on a long-term basis. All the UK governments have also made it unattractive to house benefits tenants. None of the UK governments have put a system in place that would effectively incentivise housing that is cheap to heat and reduces CO2 emissions, or make it retro-fitting existing house stock with technologies that work actually worth it. All of the governments are all at fault, the SNP is just the worst offender, but they need to learn from the example set by the mistakes of the SNP, a one-trick-pony-party driven by independence at all costs, regardless of the impact of its policies on education, housing or healthcare for Scottish citizens.

All of the UK governments need to ask themselves the question "...how do I make it attractive for landlords or owner occupiers to house people in housing that is safe and secure, as cheap as possible to live in, whilst reducing C02 emissions." None of them have done it so far. Their policies have not got rid of "slum landlords", whatever that may mean; the "slum landlords" are still there. All that they've done is drive good landlords out of the market and into such things as short-term lets.

Unfortunately both Patrick Harvie and Ross Greer will use this crisis to futher their career . Only showing the narrative that suits them .

They have such strong believes in a fair and equal society why don't they only draw the average wage as an income.

But double standards ok for them to take as much from the system.

Jim Parker brought up a brilliant point only just over 1200 landlords in Scotland own more than 3 or more properties this equates to 1% off all registered landlords..

Out off 260000 registered landlords 94% only own one btl.

Leaving 5% with two properties.

Hope Jim will correct this.

Most landlords hardly ever raised rents during a tenancy . Now they have no choice.

Yet social housing which now have many above average rent can and do most years.

The Scottish herald stated. the rent ban has done nothing to help those most effected by the cost of living as those in social housing which Patrick Harvie says are most effected got a rent rise last April 22 and a Futher rise this year upto 11% .

In addition to the council tax bill going up in most areas by 8%.

The reason given our costs have gone up.

Amazingly Patrick Harvie has stated private landlords are unaffected by the cost of living.

He has used new rents available to manipulate the figures for his argument not actual rent many tenants paid.

I would love rents he claims many tenants are paying. Most of mine are or were on par with social housing .

To be fair I believe the Green MSPs did opt to receive only the average wage, not sure what happens to the surplus. I think they do believe they are principled and fair minded, but on certain issues, particularly housing, they are ill-informed, close-minded, and delusional. The SNP used to be more realistic in realising the contribution of the PRS, but seem to have been swayed like all the rest by the populist appeal of landlord bashing. STL bashing is now the latest sport. Despite all the over regulation, at least you don't need permission to be a PRS landlord. In many areas, you now first need planning permission for ST letting. You then need to comply with the many requirements, some of which are over the top, and all costly and time consuming, before you can even apply for a licence. The fees and requirements vary from one council to another, and there is no guarantee of success, with most shared entrance properties in Edinburgh and Glasgow being refused. Collectively, the onslaught on both of these sectors must represent one of the biggest attacks on individual civil liberties there has been for a long time in our supposedly democratic and liberal country. None of it is helping to alleviate the housing crisis but only making it worse. It remains to be seen what the impact will be on tourism.

Reply to the comment left by Neil Robb at 19/08/2023 - 07:45
So the SNP have had an impact:

"Nicola Sturgeon’s war on holiday lets sends Edinburgh accommodation prices to record high
Airbnb listings in the city slump as the cost of a one night's stay nears £200"

https://www.telegraph.co.uk/money/consumer-affairs/nicola-sturgeon-holiday-lets-cost-edinburgh-festival-fringe/

But it certainly hasn't brought down rents or provided greater choice for tenants.

So basically, if the Government hadn't interfered Tenants would be paying much lower rents!! I can see the English Government making the same mistake by introducing EPC stipulation and Renter's Reform Bill. If it ain't broke don't fix it!

I am a landlord in Scotland. I have a long-term tenant, 14 years, and have rarely increased his rent. I did not need to as he is a good tenant and the mortgage rates were low.

Through Covid there was a rent increase and eviction ban, then rent increases were extended until April this year. Now we can increase by 3% once a year. If we can prove that the costs have risen significantly over the last 6 months, we can apply to the rent officer to be allowed to put it up by 6%.

I did this recently as the mortgage had gone up by over £200 a month, and was allowed to put the rent up by £30pm. It is unlikely I would be allowed to do this again next year.

I am currently in the position of this property risking being unprofitable. It is still well below market rate. If the mortgage rates do not come down soon I will have to evict and sell as I cannot afford to be losing money. The silly thing is our tenant would probably prefer to pay more than be evicted, but this is not possible.

Even a system that looked at the rent in line with the market rate would be better. Here I am being penalised for being nice to my tenant, and 3% per year is never going to close the gap.

A totally messed up system that could end up with someone homeless through no reason other than ignorant government policies. I had 4 properties and am now down to 2 and will sell when I can, but would hate to have to evict to do so.

Reply to the comment left by Angela Wilcox at 20/08/2023 - 12:55
Yes, you've been penalised by the SNP for being nice to a tenant.

A friend of mine in Scotland is presently considering renting a property he's about to inherit (also in Scotland). As he's never been a landlord before I just advised him that if he is genuinely considering doing it then the SNP have taken action against rent increases and so he needs to go in at the maximum possible rent at the beginning. Probably otherwise he'd rent at a low rent as he's not particularly motivated by money and he's the kind of person who would hold rent down for a good tenant, like you.

And because of the action the SNP has taken anybody considering renting a property in Scotland needs to do the same. The SNP have dramatically increased a landlord's risk which has resulted in rents having to rise. They've apparently just done something similar to the Edinburgh festival.

This has come as a real shock, I wouldn't have imagined that a rent cap would cause a crisis like landlords selling up. I am sure the SNP (Snivelling Nationalist Party) would have foreseen this.