8:01 AM, 6th October 2022, About A year ago 1
A leading property organisation has reacted with concern to the Scottish Government’s emergency legislation to introduce a rent freeze and a moratorium on evictions in the country.
The Scottish Property Federation (SPF) says its biggest fear is that if passed, the legislation could allow for Scottish Ministers to maintain a rent freeze well beyond the First Minister’s initial announcement of six months.
The organisation points out that there are hundreds of millions of pounds worth of investment that have been put on hold in recent weeks, particularly in Scotland’s emerging build-to-rent market.
The SPF says that build-to-rent homes are usually owned and managed by institutional investors, often pension funds, and are playing an increasingly significant role in delivering high quality homes to rent across the UK.
But growing investor concern from both inside and outside of Scotland is making it extremely difficult for new projects to compete for capital with the rest of the UK and further afield.
And it is the Scottish regulatory environment that is spooking investors after the government’s unusual step to announce the rent freeze without any consultation with those in the rental sector.
The SPF adds that the Bill’s detail is unlikely to allay these concerns because the rent freeze and eviction moratorium measures could be in force until 31 March 2024.
Though the Scottish Government says the actual deadline is subject to unspecified mechanisms for review and assessment.
The federation‘s director, David Melhuish, said: “Scotland faces a chronic undersupply of rental housing across both public, private and student accommodation sectors, and this emergency legislation will make this situation much worse.
“There is a pipeline of new rented private accommodation estimated to be £3.5bn earmarked for Scotland.
“This could deliver thousands of new, high-quality and energy efficient homes for renters.
“We fear this legislation will now undermine the likelihood of many of these complex and capital-intensive projects actually being delivered any time soon.”
He added: “Housing providers are not responsible for the cost-of-living crisis but have been singled out by the Scottish Government’s proposals that miss the critical need to attract new investment to the sector.
“The only way that pressure will be reduced on the rented sector in Scotland is by increasing the supply of new, well maintained and energy efficient homes for rent.
“New housing must become the policy priority, not blunt instruments singling out landlords, many of whom work hard to support their tenants.”
Mr Melhuish continued: “We call on the Scottish Government to recognise the vital contribution that the rented sector makes to communities across Scotland and to support those that are looking to fund and develop new homes here.
“Support must now be offered to housing providers affected by any withdrawal of rent resulting from the proposed moratorium, they too are impacted by the upwards pressure on costs and rising interest rates.”
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