Concerns over proposed rent controls in Scottish housing bill
2 years ago | 8 comments
‘Landlords have nothing to fear’ from Scotland’s rent controls plan
12:04 AM, 3rd April 2024, 2 years ago
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The Scottish Greens co-leader Patrick Harvie has defended the government’s new Housing Bill, which includes plans for rent control areas.
He reassured landlords offering fair-priced, high-quality housing that they ‘have nothing to worry about’.
The proposed Bill will task local authorities with evaluating its private rental market and recommending rent control measures to ministers.
Among the critics of the move is the Scottish Association of Landlords (SAL) which says that landlords will sell up and investment in rented housing will plummet.
‘Good behaviour by landlords needs to be encouraged’
Speaking on the BBC’s Sunday Show, Mr Harvie said that good behaviour by landlords needs to be encouraged within a long-term framework.
He said: “Those landlords who take pride in offering high-quality homes at a fair price, looking after the wellbeing of their tenants, should have nothing to worry about from these proposals.
“But those who want to price gouge have to recognise that that kind of practice is going to come to an end.”
He went on to say that housebuilding should not be focused on ‘maximising profit’ from building expensive homes, but on ‘social need’.
Cuts to the Scottish Government’s housing budget
Mr Harvie was pressed on comments made by Jane Wood of Homes for Scotland who has criticised cuts to the Scottish Government’s housing budget.
He replied: “The long-term track record of the Scottish Government on building affordable housing is significantly better than other parts of the UK. We want to continue that.
“If Westminster cuts our capital budget, it clearly, inevitably, has a knock-on consequence, a harmful consequence, in what we can invest in Scotland.”
Highlighting the effects on Scotland’s private rented sector
However, critics continue highlighting the effects on Scotland’s private rented sector now that the rent cap has been lifted – until the new Bill reimposes controls.
Oli Sherlock, the managing director of insurance at Goodlord, said: “We can expect to see a range of repercussions as a result. Firstly, tenants should brace themselves for a jump in rents.
“Over the last 18 months, lots of landlords will have seen their mortgage costs shoot up, so will be looking to recalibrate rental prices.
“This is likely to spark a ripple effect across the market, as renters give notice and seek out new, cheaper places to rent.”
He adds: “This will see regional price averages shift around and particularly affect demand outside of city centres.
“In addition, we may see the chatter around landlord exodus reduce – the lifting of this restriction could encourage wavering landlords to stick around and not sell up, which is positive for the market overall.”
Tags:
Housing Bill, Impact of Housing Bill on Landlords, Landlords, Patrick Harvie, Reassurance for Housing Providers, rent cap, rent controls, scotland, Scotland Rent Controls Plan, Social Responsibility in Housing Provision
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Member Since December 2023 - Comments: 1573
3:29 PM, 3rd April 2024, About 2 years ago
A fair rent should be easy to calculate based on house prices.
If a house would sell for £200k and if mortgage rates are 6% then the base net rent is £1,000 per month (interest on £200k). This could be taxable income at 40% so that’s £1,250 (accounting for the 20% tax credit).
Then, add on additional SDLT, letting fees, maintenance, repairs, voids, loss of child benefit, risk and profit and a fair rent could start from £1,800 (perhaps) for a property worth £200k.
I’m sure somebody could assign numbers to all of the variables.
Member Since September 2018 - Comments: 3507 - Articles: 5
4:19 PM, 3rd April 2024, About 2 years ago
If he actually thinks about it for more than 30 seconds he will realise that ‘fair rent’ is determined ultimately by the renter, not by the LL or the government.
A property will ONLY be rented IF the person looking deems the rate fair themselves. No one forces a tenant into a contract.
A bad house will remain empty just as one that is deemed to expensive will.
Why now make the provision of accommodation so toxic to the landlord that the only effect is that supply now reduces further?
Member Since March 2023 - Comments: 1506
5:15 PM, 3rd April 2024, About 2 years ago
Reply to the comment left by Martin Roberts at 03/04/2024 – 13:19
Martin, companies can afford to sell properties cheaply (cheaper actually) as its affordable housing – trouble is the affordable housing is subsidised by the other occupants of the estate. How much of each new build is creamed off to subsidise the affordable housing ? – Lately a number of builders have said that they can’t afford to build any affordable housing as the costs would push the price of the other properties too high.
Member Since November 2016 - Comments: 227
6:48 PM, 3rd April 2024, About 2 years ago
Reply to the comment left by GlanACC at 03/04/2024 – 17:15
Yep.
Member Since September 2023 - Comments: 335
7:39 PM, 3rd April 2024, About 2 years ago
More sh~t£ from the politians. The market determines the price not rhe politian.
Member Since December 2023 - Comments: 1573
7:41 PM, 3rd April 2024, About 2 years ago
Reply to the comment left by GlanACC at 03/04/2024 – 17:15
The issue that I have with ‘affordable housing’ is that, when it’s time for the FTBers to sell, the houses are sold at full market rates with no regard for affordability.
Member Since February 2018 - Comments: 627
9:03 AM, 6th April 2024, About 2 years ago
“price gouge’, what is the Return on Capital Employed in the PRS?
Member Since November 2016 - Comments: 99
11:16 AM, 6th April 2024, About 2 years ago
If you consider how much it costs to redecorate Downing Street every time there is a new Prime Minister then you will see the flaw in letting tenants decorate to their own taste.
Member Since May 2023 - Comments: 5
2:01 PM, 9th April 2024, About 2 years ago
Always be fearful when a politician says you have nothing to fear