Scotland’s rent freeze based on ‘skewed numbers’

Scotland’s rent freeze based on ‘skewed numbers’

0:03 AM, 14th December 2022, About A year ago 3

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One reason why the Scottish Government imposed its controversial rent freeze and ban on evictions was a belief that rent rises during the cost-of-living crisis were too high.

But one proptech firm says its own figures show that rent rises were actually ‘moderate’ despite other surveys showing that tenants were facing hefty increases.

And the firm says that the only way for the Scottish Government to resolve its rental crisis is to ensure it uses accurate data.

The automated rental payment provider PayProp says the government to scrutinise carefully the sampling of statistics when it comes to considering feedback on the controversial rent freeze measures.

Data based on hundreds of thousands of transactions

Payprop says it has accurate data that is based on hundreds of thousands of transactions that have been made via its platform.

And its figures show that landlords have imposed far more moderate rent rises than have been shown in other surveys.

Managing director Neil Cobbold said: “According to our figures, the average rent increase for renewed Scottish tenancies in the 12 months to November was 7.2% compared to a UK-wide average increase of 7.5%.

“Other recent surveys reported much higher numbers, but they either looked only at new tenancies or only at new rental listings, which we believe skews the numbers.”

‘Greatest single contributor to increases’

Mr Cobbold added: “Historically, new tenancies have been the greatest single contributor to increases.

“Excluding new tenancies from the numbers therefore removes a major skewing effect on rental growth figures.

“And of course, asking prices do not reflect true rental prices as invoiced and paid in real rental transactions.”

The firm points to data from the Office of National Statistics (ONS) which has a lower figure of 3.8% – but its data includes all tenancies, including those that are still within a fixed term, that is, without rent increases.

PayProp says it only looked at existing tenancies with a rent increase during that period.

Scotland’s current rent freeze

Scotland’s current rent freeze, combined with a moratorium on evictions, was introduced by Nicola Sturgeon’s government in The Cost of Living (Tenant Protection) (Scotland) Bill as emergency legislation in October.

The measures were backdated to September 6th and are set to remain until the end of March 2023, though they could be extended.

The Scottish Government is currently considering submissions, including PayProp’s, to a consultation on the rent freeze bill.

Mr Cobbold is hoping that more accurate data on rents will help the Scottish government to make an informed decision on whether to extend the rent freeze in March.

‘Recognise the need to protect and support tenants’

He said: “As property industry professionals, we all recognise the need to protect and support tenants through this cost-of-living crisis.

“But if we want to solve the problem, we need to understand it first, and the perception that rent growth in Scotland has been out of control isn’t supported by the data.”

In fact, he warns that freezing the rents that landlords can charge could make life more difficult for tenants.

Mr Cobbold explained: “While some tenants have been temporarily protected from rent increases, the moratorium has damaged landlord confidence, which could have had the unintended opposite effect of putting upward pressure on rent growth if more of them quit the market.”

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15:48 PM, 14th December 2022, About A year ago

Its a natural response, if a landlord thinks there are going to be unfair restrictions put on their business then they will obviously responsed to protect themselves when they can ,if there were no unfair restrictions then they would obviously not make any rash decisions ,The eviction ban and rent freeze has led to Landlord’s putting up rents to cover future costs afraid that they would not be able to if they waited.
I feel sorry for the Good tenants struggling to make ends meet.
Well Done Sturgeon and Sweeney a pair of jobsworth muppets with not a clue between the pair of them on how the PRS Works .

Reluctant Landlord

14:21 PM, 15th December 2022, About A year ago

you reap what you sow. As soon as the rent freeze is over tenants will be getting both a S21 and rent increase. If they can't pay the rent increase then the S21 is going to be issued as a result.
I wonder if many Landlords and existing tenants will work this out between themselves? for example, you can have a S21 if you don't want to pay a rent increase, or take a rent increase on the existing tenancy but still run the risk of a S21 (further down the line if this eviction ban rears its head again) , or perhaps surrender the current tenancy, but then issue a new one (tenants stays where they are) with an even higher rent amount agreed (adding in cost of time to re do a contract and re-deposit etc). This will ensure the tenant and LL will know the rent is at least set for a guaranteed 12 months with first 6 month min of occupancy for the tenant.
Obviously only works with a tenant you want to keep....or who wants to stay....


15:58 PM, 15th December 2022, About A year ago

Personally I wouldn't risk coming to any agreement with the tenant ,whats to say the tenant won't report you and say they were coerced into accepting a higher rent ....
How would the Council act? ,with a massive fine and bring your status as a fit and proper person into question and ability to rent out property.
Best to stay within the rules even if they are unfair and ill thought out ....

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