Scottish government faces rent control backlash

Scottish government faces rent control backlash

0:02 AM, 11th June 2024, About 4 days ago 4

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The Scottish government’s own economic agency has warned that rent controls will only make the housing crisis worse.

South of Scotland Enterprise (SOSE) says the Scottish Housing Bill’s move to introduce long-term rent controls has sparked uncertainty, leading landlords to leave the market.

Earlier this year, the Scottish government, along with six councils across Scotland, officially declared a housing emergency.

Landlords leaving the sector

In a submission to the government consultation on the Scottish Housing Bill, the agency warns that landlords are experiencing significant challenges.

The written submission said: “There are over 10,000 registered landlords in the South of Scotland offering over 17,500 properties. Like many other places in Scotland, we have seen a reduction in the number of both landlords and properties since at least 2022.

“In our engagement, we have heard that increased uncertainty, greater regulation (both rent freezes/controls and energy efficiency requirements) and higher interest rates are causing landlords to leave the sector.

“The vast majority of landlords in our region have fewer than five properties and, at this scale, their rental business is often a key part of their income rather than just a long-term investment.”

SOSE warns the impact on rural areas will have a devasting effect.

The agency adds: “This means that changes in the sector and economy can significantly affect their appetite and ability to remain as landlords and have a disproportionate effect on the stability of the sector in the region.

“The impact is particularly stark in our largely rural region where settlements are smaller and more dispersed leaving people with few or no options to find alternative nearby accommodation.”

Fragility of the private rental sector

The agency says the supply and demand imbalance is causing huge challenges in the private rented sector.

The submission from SOSE adds: “A decline in the number of landlords and rental properties in our region is driving even higher demand for remaining properties, for social housing and presentations to council homelessness services.

“We are very concerned about the fragility of the private rental sector in the South of Scotland and the risk that more landlords will sell their properties, further reducing supply of much needed private rental properties.

“Certainty and stability are very important to keep existing landlords in the sector as well as to support more investment in private rental properties, including in Build to Let.”


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Comments

Beaver

10:09 AM, 11th June 2024, About 3 days ago

I'd just like to say that it's great for once to hear something intelligent coming out of housing policy makers in Scotland. Well done South of Scotland Enterprise for speaking truth to government.

Reluctant Landlord

10:53 AM, 11th June 2024, About 3 days ago

Reply to the comment left by Beaver at 11/06/2024 - 10:09
agree. When an existing LL sells up they are not being bought up by the new generation of LL's either so you are also stuffing up the future attraction/investment in those properties/refurbs/re utilisation of buildings that Build to Let organisations are not interested in and won't touch.

B2L aren't interested in rural properties, diversely located, family sized accommodation in nice established communities either.

They want mass building so the number stack up, nice easy put up up, stack em up square boxes to fit those single and working. Like the PBSA - all singing all dancing shiney and modern...and the tenants pays for all the bells and whistles.

K Miya

22:53 PM, 11th June 2024, About 3 days ago

Not only rent control. I gave up being a landlord because everything was on the tenants side I couldn't evict for 2 years. There is no landlord protection.

Beaver

10:14 AM, 12th June 2024, About 2 days ago

Reply to the comment left by K Miya at 11/06/2024 - 22:53
I agree with that although this particular post is about:

"South of Scotland Enterprise (SOSE) says the Scottish Housing Bill’s move to introduce long-term rent controls has sparked uncertainty, leading landlords to leave the market."

South of Scotland Enterprise are based in Dumfries and Galloway and the Scottish Borders. I know Scottish landlords who have given up in Scotland and started to invest in the English borders. South of Scotland Enterprise is probably going to be more conscious of that phenomenon than policy makers in Glasgow or Edinburgh.

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