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 4 weeks ago 73

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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

DSR

17:09 PM, 6th September 2022, About 4 weeks ago

Reply to the comment left by Luke P at 06/09/2022 - 17:03
is bloody criminal!

Luke P

17:14 PM, 6th September 2022, About 4 weeks ago

Reply to the comment left by DSR at 06/09/2022 - 17:08
Honestly, they'd dig up landlord corpses and insist they continue in their capacity as a landlord (like it's not a free choice)...

DSR

17:19 PM, 6th September 2022, About 4 weeks ago

Reply to the comment left by Luke P at 06/09/2022 - 17:03
so following on, if you genuinely 'market' and prep your house for sale then you can at least issue Notice (which gives the tenant 2 months warning? I assume its a S8?) . If they do not move out on expiry, then you still have the option of accelerated (which must be progressed within 6 months)

So you could still do all this, as a 'just in case' plan? At least the courts would see an increase in Notices and that in itself may cause the issue to come back to haunt Ms Krankie?

robert fisher

17:24 PM, 6th September 2022, About 4 weeks ago

How can freezing the rents in a private business be legal? I don't see price freezes being mandated in any other business.

Dennis Leverett

17:26 PM, 6th September 2022, About 4 weeks ago

Reply to the comment left by robert fisher at 06/09/2022 - 17:24
That is a very valid point.

The Forever Tenant

17:26 PM, 6th September 2022, About 4 weeks ago

I almost feel as though the reaction here is a good example of something I said in the past about how the government usually puts regulations into place in reaction to events.

Already there are posts about how to get round the ban one way or another. That sort of talk will end up with stricter regulations in place.

If you want to work out how to challenge this, you would be better off on working on a plan that is not just how to make the tenants worse off.

Dennis Leverett

17:34 PM, 6th September 2022, About 4 weeks ago

Reply to the comment left by The Forever Tenant at 06/09/2022 - 17:26
Perhaps you could offer some advice on how to achieve what you suggest. Whatever happens it will be the tenant who pays for it or loses his/her home. Finding a solution to a very misplaced problem is not easy.

Neilanglim

17:49 PM, 6th September 2022, About 4 weeks ago

Happy for a rent freeze if we can freeze tax on rental property income 😂😂😂😂

TrevL

17:58 PM, 6th September 2022, About 4 weeks ago

Reply to the comment left by Dennis Leverett at 06/09/2022 - 17:34
Nah, some Landlords will be bankrupted by this, and many more will sell up. Bravado doesn't protect you against a change in the law.

But, I don't see the new westminster government doing similar, maybe the next (red) one will.

John McKay

18:57 PM, 6th September 2022, About 4 weeks ago

Reply to the comment left by robert fisher at 06/09/2022 - 17:24
An energy price cap is price freezing. But is it legal to do in in the PRS?

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