Rent controls in Scotland: ‘Unworkable and unaffordable’

Rent controls in Scotland: ‘Unworkable and unaffordable’

0:06 AM, 23rd August 2024, About a month ago 4

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The Housing Scotland Bill must be scrapped or significantly amended, a leading property firm warns.

DJ Alexander, Scotland’s largest lettings and estate agency, says that the proposed rent controls will do more harm than good.

A recent report by the Institute for Economic Affairs (IEA) found that rent controls have consistently failed to achieve their intended objectives.

They increase prices, reduce the availability of properties and lower the quality of housing.

Landlords, discouraged by lower returns, are less likely to invest in repairs or improvements, further deteriorating the housing stock.

Scotland Housing Bill is ‘unworkable’

The chief executive of DJ Alexander, David Alexander, said: “This is further proof that the Scotland Housing Bill, in its current form, is simply unworkable.

“The IEA report states, what everyone in the sector already knows, that rent controls have never worked and never can work because they simply make the situation worse for tenants rather than better.”

He adds: “They lead to reduced investment, fewer homes, which are of poorer quality, resulting in greater demand and higher rents for tenants.

“There must now be some reflection on whether the Scotland Housing Bill can continue in its current form given that if it is implemented it will make a terrible situation even worse.”

Additional costs of monitoring rents

The firm says that IEA’s findings are supported by Scottish council leaders, who have raised concerns about the additional costs of monitoring rents under the Housing Scotland Bill.

Edinburgh City Council estimates that compliance would cost more than £5.5 million – a burden it says it cannot afford.

The warning from DJ Alexander comes as Scotland’s private rented sector continues to struggle.

Following the introduction of rent controls in 2021, the number of available properties fell by 60,000.

While it has since recovered slightly, it remains 50,000 units below pre-control levels.


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Jaskk

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8:53 AM, 23rd August 2024, About a month ago

Yes, properties for rent fell 60,000, but those properties didn't disappear and were just then sold, many now doubt to first time buyers and families giving them the security of home ownership. Of course Scotlands largest lettings agency will complain as it means less money for them in fees.

Monty Bodkin

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11:28 AM, 23rd August 2024, About a month ago

Reply to the comment left by Jaskk at 23/08/2024 - 08:53
"Yes, properties for rent fell 60,000, but those properties didn't disappear"

Most got turned into holiday lets and second homes;

https://www.telegraph.co.uk/money/property/buy-to-let/scotlands-holiday-let-backfires-fringe-black-market/

https://www.theguardian.com/money/2024/mar/31/this-hits-the-wrong-people-rich-second-home-owners-who-can-afford-to-let-them-sit-empty-will-carry-on

Rent controls never work.

Cider Drinker

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10:01 AM, 25th August 2024, About a month ago

For rent controls to work we need…

1. Interest rate controls.

2. Ridiculous legislation controls.

3. Rent paid on time controls.

As it is, I think when Labour leave office, interest rates will be higher, ridiculous legislation will be out of control and many more tenants will be in arrears.

Time to update your risk assessments.

Cider Drinker

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10:06 AM, 25th August 2024, About a month ago

Reply to the comment left by Jaskk at 23/08/2024 - 08:53
Some will have been sold to first time buyers and families.

However, some of the buyers would have preferred to rent, if only the rental market had sufficient capacity. For many people, renting is far more secure than buying.

There’s a shortage of homes for people to buy. There’s a shortage of homes for people to rent privately. There’s a shortage of homes in the social housing sector.

There’s no shortage of people coming to our country.

I wonder if there could be a link?

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