Scotland’s housing crisis: ‘Anti-landlord legislation’ deters developers

Scotland’s housing crisis: ‘Anti-landlord legislation’ deters developers

0:04 AM, 16th April 2024, About 2 months ago 7

Text Size

Scotland’s housing sector is in crisis as developers are being deterred by what they term as ‘anti-landlord legislation’ and are opting to build in England instead, The Times reports.

The shift could result in Scotland missing out on the construction of thousands of new homes.

Jonathon Ivory, the chief investment officer at Packaged Living, told the Times that the company has no plans to invest in Scotland due to the ongoing anti-landlord legislation.

He said: “We aren’t investing in Scotland right now due to the continued presence of anti-landlord legislation.”

Declared Scotland as a no-go zone for investment

The newspaper says industry insiders have identified nine other developers that have declared Scotland as a no-go zone for investment.

Scotland’s housing sector has become depressed due to a combination of the new Housing Bill, cladding legislation and the proposal for new rent caps.

The depression affects not only new builds, but also the availability of existing stock for rent.

The Chartered Institute of Housing declared a housing emergency across Scotland last month, warning that the Scottish government’s homelessness plans were at risk without a strategy for the private rented sector.

Several cities and councils, including Edinburgh, Argyll and Bute, and Glasgow, have declared emergencies.

Edinburgh has lost thousands of homes to short-term let businesses, and rents have risen faster than anywhere else in Scotland.

Meanwhile, housing developers continue to focus on purpose-built student accommodation (PBSA) over affordable homes.

Shortfall of more than 100,000 homes on the market

The chief executive of Homes for Scotland, Jane Wood, highlights a shortfall of more than 100,000 homes on the market.

And she criticises the new Housing Bill for failing to address the fundamental issue of chronic undersupply and accused the Scottish government’s policies of hampering new homes coming onto the market.

Ms Wood said: “Rather than using the same tired response blaming Westminster, Brexit and cost price inflation, the Scottish government must pull the levers that it has at its disposal to encourage and facilitate home building rather than frustrating and delaying it.”

Rent cap imposed by Nicola Sturgeon’s government

The rent cap was initially imposed by Nicola Sturgeon’s government to help with the cost-of-living pressures, and it ended on April 1.

Transitional arrangements are still in place, allowing landlords to attempt to raise prices, although tenants can challenge any increases through an adjudication process.

However, campaigners for tenants, landlords and developers have criticised these arrangements as unworkable and ill thought-out.

Some landlords, the Daily Telegraph reported last week, have reportedly been increasing rents by up to 12% during this process.

Proposals for rent control areas

Patrick Harvie, the co-leader of the Scottish Greens and the tenants’ rights minister, recently published a new Housing Bill which brings forward proposals for rent control areas.

However, this is unlikely to make its way through Holyrood until next year.

Mr Harvie has previously stated that a fairer, well-managed private rented sector is in the interest of both tenants and responsible landlords.

He has also said that European countries have shown that ‘rent control can be compatible with ongoing investment’ in the sector.


Share This Article


Comments

Private Housing Provider

10:11 AM, 16th April 2024, About 2 months ago

The government needs to start working alongside private housing providers instead of abusing them.

Markella Mikkelsen

10:27 AM, 16th April 2024, About 2 months ago

It must be bad in Scotland if they think England is landlord-friendly.!?

Nav K

16:38 PM, 16th April 2024, About 2 months ago

Reply to the comment left by Markella Mikkelsen at 16/04/2024 - 10:27
Its very bad in Scotland being a landlord. For them, landlord is impure, godless alien. Being a landlord is blasphemy in the land of SNP lunatics. Everybody thinks landlord is a walking cash machine and they have every right to rob him/her. Even if Labour comes to power in 2026 in Holyrood, it will be useless. Only Reform UK has some sensible policies but they have no chance at power. Its a shame Scotland is turning like France under Hollande.

Cider Drinker

19:49 PM, 16th April 2024, About 2 months ago

By excluding landlords from the pool of potential buyers, developers will be reluctant to build new estates. They will build elsewhere.

Likewise, excluding second home owners and holiday let businesses from the pool of potential buyers, homes will not be built in tourist destinations.

Michael Booth

16:35 PM, 17th April 2024, About 2 months ago

Well well well when are you going to learn snp.

Yellard

10:09 AM, 18th April 2024, About 2 months ago

Reply to the comment left by Markella Mikkelsen at 16/04/2024 - 10:27
The pro rent control crowd will refer to other countries where rent controls supposedly don't damage rental supply but ignore where it has... Where they haven't (supposedly) damaged supply they are not comparing "like for like". Eg the German rental market includes many large landlords with tens of thousands of properties.. However even in Germany, there are problems caused by rent controls... Eg in Berlin... The rent control crowd are selective in what they see.. The answer to high rents is to build more housing....

Mr Blueberry

11:31 AM, 18th April 2024, About 2 months ago

The Scottish Government rushed in with both feet with rent caps and anti-landlord legislation. To the simple-minded, the policy should work.
The result was, however, astonishing: private builders and developers were put off building homes in Scotland, landlords who could not afford to keep their rent capped properties began selling, and the Scottish Government themselves did not build new homes for their citizens (having ironically sold off 494,000 right to buy homes before realising it was a mistake).
The Scottish government need to seek proper advice on the OUTCOMES of their policies before rushing headlong into erroneous policies that only add to the cost of living crisis.
The solution is to build more homes, ensure a good dialogue between landlords and local councils, and enact reform legislation that doesn't frighten landlords into selling millions of homes and investing elsewhere where they can reap higher incomes.
If Scotland's government continue with more anti-landlord legislation and constant blame rhetoric Scotland will face its most dire decade in centuries.

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now