Profile incomplete
10:20 AM, 1st December 2023, About 5 months ago 30
Text Size
News this week that the rent cap in Scotland has led to higher rents will be a story ignored by the likes of Shelter, Generation Rent and Acorn.
But my first thought was, who’d have thunk it?
Capping rents at a time when landlords are seeing their overheads increase and profits fall was always going to end this way.
Rent caps have never worked, anywhere. But we still have loons who don’t understand how the private rented sector works.
And the story on Property118 has the man responsible, Patrick Harvie, STILL insisting that this is the best route – and he is looking at long term rent controls.
He wants a new law to control rents in Scotland to help with ‘rent affordability’. This is baffling – there’s no connection with rising rents and the current rent cap. Madness.
While tenants will see a rent rise being capped at 3% – or 6% in special circumstances – in an existing tenancy, the real issue is that tenants in Scotland face a huge leap in rent when moving.
That was always expected by landlords who will react to the reality of having a tenant who won’t have to face a rent increase that matches an increase in their costs.
But once the landlord has an empty property, they will have to calculate the market rate (which is going up because every other landlord is in the same boat) and pay for their rising costs.
The other downside is that landlords are selling up which brings its own issues for tenants.
Fewer homes to rent means higher rents because of intense tenant competition.
I keep saying the same thing: It’s all about supply and demand.
The ONLY way to reduce rents in Scotland is to boost the number of homes available.
I see too that Scotland will allow for the council tax on second homes to be doubled from next April, affecting 24,000 properties.
This was always going to happen, and the councils will want to push homes back into the PRS – if the owners sell to landlords.
It is still a case of people in government deciding what they can do with someone else’s property.
Though I am staggered at the official figures from the statistics chief in Scotland for the higher rents – these are official figures so there’s no accusation of making them up.
Two-bedroom homes saw a rent increase of 14.3% in the year to the end of September.
That is simply astonishing for the most common type of rented property in Scotland – especially since wages haven’t increased by that much.
And then there’s an incredible 15.1% rise for one-bedroom homes. Astonishing when a rent cap is in play.
We need the likes of Generation Rent, Shelter, Acorn and the Labour Party to take a step back and look at this situation in Scotland.
There’s a lesson to be learned and it is this: Punishing landlords is not the way to resolve the shortage of homes to rent in Scotland, or in England and Wales.
Ignoring the facts of the situation doesn’t make rent caps right.
So, here’s a message to the tenant activist group: Stop making random statements that landlords are raking it in, that tenants are being exploited and a rent cap will solve everything.
It really won’t.
We also need politicians to be honest about the impact of rent caps on the private rented sector.
And we need politicians to have some intelligence to appreciate what happens when tenants aren’t protected when fed-up landlords sell up and leave.
Because protecting tenants is the last thing you do – unless you buy out the landlords who want to sell.
But I’m guessing that wanting intelligent politicians is a request too far.
To all those landlords in Scotland being lambasted for putting up rents, you have my sympathy.
To landlords in England and Wales, be prepared for more calls this winter to help tenants in a so-called ‘cost of living’ crisis.
Not for landlords, you understand. Just tenants.
Even the headline-grabbing loon Sadiq Khan has got in early this year.
He wants the Renters (Reform) Bill to be passed ‘immediately’ – ignoring the Parliamentary process, obvs.
And he calls again for a two-year rent freeze – just who does he think he is?
In recent weeks he has moaned about the homelessness problem in London and here he is putting the skids under landlords.
In a democracy, we really do get the leaders we deserve.
But what did we as landlords do to get this current shower?
Until next time,
The Landlord Crusader
Next Article
Condensation Issue - Any effective solution? HELP!
Dennis Leverett
17:06 PM, 1st December 2023, About 5 months ago
Reply to the comment left by Stella at 01/12/2023 - 16:55
Help make their majority even smaller, vote Reform. Most people I know are going from Tory to Reform just get a point across. Labour/Tory nothing between them now, they've all lost the plot. If Reform got enough seats they could really hold a lot of power, they wouldn't need to many as I think T/L will be very close.
NewYorkie
17:42 PM, 1st December 2023, About 5 months ago
Reply to the comment left by john thompson at 01/12/2023 - 13:26
Thank you.
I can't complain about my BTL journey over the past 25 years. Having London property did well for me, and I sold out when S24 loomed large, and I was on a decent salary with a massive BTL mortgage. But the final nail was my experience during lockdown, and how the system let me down at great cost to me, physically, mentally, and financially.
I went from being overly caring and considerate towards my tenants, to wanting to be rid of them ASAP and increasing rent as much and as often as I can. I am ashamed of myself for feeling this way, but that's what this government has done, and the next rabble will be worse.
NewYorkie
17:44 PM, 1st December 2023, About 5 months ago
Reply to the comment left by Dennis Leverett at 01/12/2023 - 17:06
The Libdems did it in 2010,ans forced through a lot of policies which the Tories would jot have done but for them in coalition. Reform could do the same if we all vote for them, especially in the red wall seats. Nigel Farage needs to be back in the game!
john thompson
11:44 AM, 2nd December 2023, About 5 months ago
Reply to the comment left by NewYorkie at 01/12/2023 - 17:42
I would not feel bad with having to do whatever you can to keep sane and scrape something out for your financial wellbeing. We have all been vilified and dumped on by the government, shelter, and bad tennants, while most of us provide decent accommodation and service. They can't keep punnishing us and not expect a backlash, it serves them right.
I am glad after your hard work you did well for your for a while out of the prs,
I guess all good things come to an end, and this ludicrous Con government has certainly put the nail in the coffin of so many businesses.
I've not been so lucky.
I saved for years to get a rental property around 2020 with good intentions of providing a decent home and making some profit in the future. Not long after the s**t hit the fan with covid and then cons introducing ever more destructive reforms and tax grabs.
I spen alot on referbing the rental and have only just started bringing in a profit, but with my mortgage rates increasing, taxes, maintenance and everything there is very little profit for all the time and money I've invested.
Still lam lucky I've now got good and happy tennants, hopefully they will stay till house prices increase in the future and I can sell up with a decent return and get out of this lame and toxic minefield of a business.
Jessie Jones
12:19 PM, 2nd December 2023, About 5 months ago
Double council tax for second homes? I wonder how this will affect those whose second home is abroad, or those who live abroad, but whose second home is in Scotland. Would it matter if one house was in England, and another in Scotland? How will they decide which is the main home, and which is the second home? Or couples, who have their main home in one name, and the other home in their partner's name. What happens when two single home owners decide to get married, but keep both houses.
Double council tax would run a very real risk of running contrary to the Equalities Act, in that people who are nationals of foreign countries could well be taxed differently to Scottish Nationals, and people getting married would also suddenly fall foul of increased taxes.
Arnie Newington
12:53 PM, 2nd December 2023, About 5 months ago
I wrote to my MSP about the proposed rent controls for new tenancies this is the reply I received:
Thank you for your email. I appreciate your concern with the New Deal for Tenants proposals and the Cost of Living (Tenant Protection) Act, which introduced a temporary eviction moratorium and rent cap.
The Landlord and tenant engagement questionnaire on rented sector reform consultation remains open, and if you have not already done so I would suggest you complete the questionnaire here. As the consultation is ongoing, it would be inappropriate for me to comment, however, this is an essential part of the policymaking process as it provides an opportunity to consider public opinion and expertise on a proposed area of work.
With this in mind, I will share the relevant information on the safeguards for landlords included in the Cost of Living (Tenant Protection) Act, which may be useful for you.
The Cost of Living (Tenant Protection) Act, including the private rent cap, and additional eviction protections, were introduced to combat the unprecedented cost of living crisis, following months of inaction from the UK Government. While the Scottish Government does not have the powers to prevent people’s energy bills from soaring, it can take action to ensure that their rents do not increase. This emergency legislation ensured this was done in a way that is legally robust, with the right safeguards for landlords in place.
Under the legislation, landlords are still able to sell their property depending on their intentions and/or financial situation. The landlord can sell the property with the ‘sitting tenant’ in situ, meaning they can sell the property without evicting the tenant and the new owner will take over their obligations as landlord. This option can be discussed with an estate agent.
Additionally, if the landlord is in financial difficulty and at risk of homelessness, they can begin evictions proceedings under one of the exemptions in the legislation (i.e. ‘Intent to sell property to alleviate financial hardship’). Financial hardship of a private landlord would then be assessed by the First-tier Tribunal (Housing and Property Chamber), who would consider all relevant information about the landlord’s finances, and decide whether it is reasonable to evict in this case.
More information on the safeguards for landlords can be found here.
I hope the above information is useful.
NewYorkie
13:21 PM, 2nd December 2023, About 5 months ago
Reply to the comment left by john thompson at 02/12/2023 - 11:44
I wish you every success.
NewYorkie
13:25 PM, 2nd December 2023, About 5 months ago
Reply to the comment left by Stella at 01/12/2023 - 16:55
Their majority will be smaller, but we've just seen massive majorities disappear, and Reform helped make that happen.
Kevin C
20:11 PM, 2nd December 2023, About 5 months ago
Keep harassing and targeting landlords!
I'm loving it! Price for a studio flat in zone 2 London is around £1700 😀
Next year, I'll increase it to £1800....with all the rising costs and other licensing cr@p....only way to fight is to increase rent and that's what i will be doing.
moneymanager
17:19 PM, 7th December 2023, About 5 months ago
Reply to the comment left by Trisha at 01/12/2023 - 10:45
"The lunatics are really running the asylum ", in to the ground.