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 70

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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

Jon Jones

0:17 AM, 7th September 2022, About 3 weeks ago

Its most often the case .. not that the tenant can't afford to pay the rent, most of the times they just refuse too. I have a tenant right now who is £2500 pounds in arrears and is on holiday in Spain. (I know, everyone has a right to a holiday🥱). Now, I'm not able to lawfully evict them. The government will not help, the courts are not on our side. It's time to take matters into our own hands. we have no choice. Do, whatever we need to do to get our rent and our property back.

Mick Roberts View Profile

5:52 AM, 7th September 2022, About 3 weeks ago

They doing it again. Look what happened in Covid calling for Rent Holiday & no evictions etc.
We people that actually rent houses out, knew Landlords would be selling in their droves when they could after hearing stuff like this & tenants would then be worse off-And that's what happened.
Remaining Landlords now have mega demand & can charge what they like.

These people in power who change sensibility make it better for that current tenant temporarily, but the next 100,000 looking for a house or move cannot do so, as no Landlord takes them or if they can, super expensive rents. It's getting a case where only the well paid can afford to rent. All Govt & Council & Shelter & Generation Rent making.

Shelter will applaud this & say it is working-As above for the current tenant. I'd say it works more for the Landlord & Letting Agent that slugs it out, as when the freeze or ban over, we all know rents shoot up massively as more demand comes. Letting Agents are loving the higher commission from higher rents. And why shouldn't they.
And us Landlords then end up taking it out of the innocent tenants by increasing the rents at every opportunity as we just don't know when the next attack is coming. And we think we got a rent freeze coming again, we think Gees, best get some higher rent in now even though I was happy to leave at that existing rent to keep tenant happy.

And before Generation rent shoot me down, I want rents to reduce so my tenants can have a choice to move, so I can sell my ruddy houses.

Chris Bradley View Profile

7:34 AM, 7th September 2022, About 3 weeks ago

Reply to the comment left by Porky at 06/09/2022 - 23:19
I do not have mortgages on my rentals either, but all my income comes from rentals, and the cost of food, the cost of services the cost of my energy has all increased and I do not get any benefits, so no extra funds coming my way. So the tenant gets a rent freeze and I have to freeze because I can't up my tenants rent a little to help me out. So it's not just about financing choice.
Also what about the HMO where tenants can sit nice and warm blasting the heat, and not have to worry about energy costs as the landlord has to absorb them.
Renting is a buisness and landlords should be able to adjust the cost of their product in line with their expenses, rent increases is already limited to annual increases anyway

Porky

7:47 AM, 7th September 2022, About 3 weeks ago

Reply to the comment left by Chris Bradley at 07/09/2022 - 07:34
I fully agree Chris. My point was only about LL passing on their financing cost increases to tenants.

Ashley

8:19 AM, 7th September 2022, About 3 weeks ago

Once again Sturgeon gets it wrong. Going for the headlines that she's protecting tenants against these unscrupulous landlords.
Her thinking is as always shallow and niaive. The unintended consequence of this policy is that private landlords will sell up creating a larger problem for Scottish renters. Shocking given that Scotland does not have a strategy for renting in Scotland. Well let's see the fallout from this!

Navro18@gmail.Com

11:45 AM, 7th September 2022, About 3 weeks ago

I must have missed the accompanying change about freezing people's mortgage repayments and banning repossessions too because of course this is inconsistent without that

DSR

12:25 PM, 7th September 2022, About 3 weeks ago

Reply to the comment left by Porky at 07/09/2022 - 00:14
you still forget, no matter how screwed up the market is, the tenant still has the power to move at any time by giving notice.

DSR

12:28 PM, 7th September 2022, About 3 weeks ago

Reply to the comment left by Porky at 07/09/2022 - 07:47
ANY increases that a LL has will ultimately be passed on via an increase in rent if that is what is required. In a free market economy thats what happens. Tenant and LL are subject to the same - no matter what 'side' of the fence they are on!

Porky

12:32 PM, 7th September 2022, About 3 weeks ago

Reply to the comment left by Annie Landlord at 06/09/2022 - 19:14
According to Scot.gov site you need to give 6 months notice to terminate a rental agreement anyway and this will take you to the end of the Sturgeon freeze on March 23 and reason for terminating for selling the property is considered valid but you must sell you can't just re let. If this is incorrect then the Scotish Gov Web site is in error.

Porky

12:44 PM, 7th September 2022, About 3 weeks ago

Reply to the comment left by DSR at 07/09/2022 - 12:25
That's fair enough isn't it? If I was renting I wouldn't want to be tied to a long-term letting arrangement if I wanted to move because of my circumstances. The customer is king in these matters.
If its a good tenant they will give you plenty of notice I'm sure. If they are a bad tenant you woukd probably be pleased to see the back of them.

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