Scotland’s rent freeze will see landlords ‘remove their properties’

Scotland’s rent freeze will see landlords ‘remove their properties’

15:39 PM, 6th September 2022, About 3 weeks ago 72

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In a bid to help tenants struggling with rising bills, Scotland’s First Minister Nicola Sturgeon has announced a rent freeze for private and public rented properties.

The rent freeze starts immediately and will be in place until the end of March next year – and the government will also introduce a moratorium on evictions during winter.

However, Scottish landlords say the move will see landlords removing their rental homes from the market.

And one leading industry expert says Scotland’s move could see rent controls mark ‘the end of the private rental sector as we know it’.

Rent freeze in Scotland is necessary

Ms Sturgeon told MSPs at Holyrood that the rent freeze in Scotland is necessary because the cost-of-living crisis is a ‘humanitarian emergency’ that could cost lives.

The Scottish government will now table emergency legislation that will ban evictions during winter – and freeze rent until next spring.

Ms Sturgeon also says that the devolved governments need to meet with the UK government about the steps that should be taken to help people – raising the prospect of a UK-wide rent freeze.

The Scottish government is also looking to increase Scottish child payments which will pay extra money to families who are receiving some benefits.

Also, rail fares will be frozen by ScotRail until March 2023.

‘Landlords will be removing their vacant properties from the rental market’

John Blackwood, the chief executive of the Scottish Association of Landlords (SAL), said: “Since rumours of this announcement broke, I have been inundated by landlords saying they will be removing their vacant properties from the rental market, and I don’t blame them.

“Who on earth is going to let a property in the knowledge that they will be unable to meet their own financial and maintenance obligations if their tenants don’t pay the rent or their outgoings increase?”

He added: “Instead of helping tenants pay their bills, the Scottish Government has chosen to penalise people who have provided the homes politicians have failed to provide for decades.

“Once again the Scottish Government fails to grasp the reality of Scotland’s housing crisis and has chosen the easy option of attacking landlords for political reasons which will only further reduce the supply of housing, putting more people at risk.

“This is not a solution; it will only cause more hardship.”

‘Students and others who can’t find suitable accommodation’

He went on: “In just a few weeks, we will see more stories of students and others who can’t find suitable accommodation.

“We warned of this last year, and nothing was done but no one should be in any doubt where the blame for that new crisis will lie. It will be at the door of Bute House.

“Despite reassurances from Scottish Ministers that they value the role private landlords play in provided much needed housing, we are astounded that once again they have chosen to attack landlords at a time when they should be encouraging landlords and tenants to work together to overcome financial hardship.”

‘Rent freeze represents a potentially seismic new frontier’

Tom Mundy, the chief operating officer at Goodlord, the lettings platform, said: “This rent freeze represents a potentially seismic new frontier in UK lettings policy.

“While we understand the need to support tenants, introducing rent control could mark the end of the private rental sector as we know it by stripping away the central incentive which encourages people to invest in buy-to-let properties.”

He added: “There’s a major risk that this freeze will push landlords out of the PRS market at a time when pressure on rental stocks is particularly acute.

“This will squeeze the whole lettings market and create bigger headaches for the Scottish Government later down the line.

“Long-term, it could serve to stymie all future investment in the space and fatally undermine the system.”

‘A fundamental re-write of the UK lettings market’

Scotland's rent freeze will see landlords ‘remove their properties’ property118.com 2The chief executive of tenant referencing firm Vouch, Simon Tillyer, said: “This is a huge step from the Scottish Government. It could be the first towards a fundamental re-write of what the UK lettings market looks like.

“At a time when too many landlords are already leaving the market and there are more tenants than there are homes available to rent, we should not be taking steps that will drive even more landlords away from the PRS.”

He added: “I wouldn’t be at all surprised if this is the final straw for landlords and sparks an exodus. This policy risks creating more problems than it solves.”

Mark Alexander, the founder of Property118, said: “The Scottish government need to consider how many rental properties currently being marketed to let will revert to being marketed for sale as a result of this announcement.

“There is already an acute under-supply of available rental property in many areas of Scotland, and this will only serve to exacerbate that position.”



Comments

Chris Bradley View Profile

15:52 PM, 6th September 2022, About 3 weeks ago

At a time when mortgage interest is rising, cost of insurance, cost of licences, cost of services boiler etc all going up. So landlords costs are increasing and rental is frozen, can't see the small portfolio landlord surving.

I usually put my rent up annually and my rent rent increase would be the end of March, and my increases are less than market rent, and about half inflation, so I have decreasing yearly returns, but it gives good tenants a stable home, but if I cannot increase rent, then I cannot absorb all of the inflation accross my costs, so I will have to serve notice as soon as able and sell the properties

Blodwyn

15:58 PM, 6th September 2022, About 3 weeks ago

The Law of unintended consequences?
How predicatbly stupid and SNP!!! And they think they can run a country outside the United Kingdom? I am a Scot and my blood boils that I am denied the chance to vote a resounding No to the nonsense spouting out of Holyrood.

DSR

16:33 PM, 6th September 2022, About 3 weeks ago

when is the rent freeze applicable from? Surely this has to be in legislation before it can be applied?

Eviction ban? As of when? Sounds like there will be all Scottish LL's furiously issuing S21's this afternoon as a 'just in case' plan, and others looking to leave properties empty until March.

Well done Queen Krankie!

Luke P

16:41 PM, 6th September 2022, About 3 weeks ago

Reply to the comment left by DSR at 06/09/2022 - 16:33
S.21 has gone in Scotland. You can only evict for genuine sale (or for you/close relative to live in) if tenant not breaking tenancy clauses...

Dennis Leverett

16:50 PM, 6th September 2022, About 3 weeks ago

The writing is now definitely on the wall, unless the gov. freezes all OUR rapidly increasing costs forever. Why don't these people ever think these ideas through, its just unbelievable. Like most of us, if I take on a project I thoroughly think it through and cost it all up etc. to make sure its viable. It seems there is absolutely no-one in Government that can actually do this and its been proven many a time. Priority's are based on how many voters they they think they can gain it seems, but of course they don't factor in how many they will lose and the REAL cost of it. I can't wait for the men in white coats to come and take me away, hee-hee haha, to a better life where I'm fed and watered and looked after. Big sigh!!!!

DSR

16:57 PM, 6th September 2022, About 3 weeks ago

Reply to the comment left by Luke P at 06/09/2022 - 16:41
The I suggest all Scottish LL's start putting up their own For Sale Boards in their property. There can't be a law to say you have to use an agent to sell your own property so what actual 'proof' would they need?

Luke P

17:03 PM, 6th September 2022, About 3 weeks ago

Reply to the comment left by DSR at 06/09/2022 - 16:57There's been at least one case of disingenuous attempt to 'live' in the property (a 1-bed flat, if I recall) by a landlord with a wife and kids (which was used to show the property wouldn't suit his needs if nothing else). It was ruled to be unlawful.
If you've no intention or the property doesn't get marketed (does Scotland retain the need for certain sales particulars?), without which true intention would easily be disproved, Scottish LLs could find themselves in bother.
Remember, selling only *enables* them, to serve Notice. The process needs to be followed and should eviction fall in 'winter', the moratorium delays matters further. Then there's the potential vacant time whilst a buyer is found...IF anyone wants to buy in Scotland now, that is...

It's all very very very wrong, though.

The Forever Tenant

17:03 PM, 6th September 2022, About 3 weeks ago

From what I can understand, an actual honest good faith attempt at selling the property with evidence.

Landlords have been taken to court and fined for trying what you have suggested.

DSR

17:06 PM, 6th September 2022, About 3 weeks ago

Reply to the comment left by Chris Bradley at 06/09/2022 - 15:52
can you not write to the tenants to tell them what the new legislation means and that as a result come March next year the rent increase will have to go up to match the real cost of renting the property as otherwise you will have to sell as a result of SNP intervention? Given them the details of their MP and invite them to write to them to explain the position from the tenant's view!

DSR

17:08 PM, 6th September 2022, About 3 weeks ago

Reply to the comment left by The Forever Tenant at 06/09/2022 - 17:03
but what choice have hey got if they face their own financial ruin/loose their own house as a result of this?

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