Scottish housing crisis demands bold PRS action

The Scottish Housing Secretary, Mairi McAllan, is being urged to prioritise the private rented sector (PRS) in her Autumn plan to tackle the nation’s housing emergency.

The call is being made by David Alexander, the chief executive of the DJ Alexander lettings and estate agency.

He says that a big shift in policy is essential to address the crisis affecting all housing sectors.

Ms McAllan has already acknowledged the challenge, stating: “I can’t tell you today exactly what my plan is, but I do intend to set out a plan as soon as I can.”

She highlighted the financial constraints limiting a surge in housebuilding, which has plummeted to its lowest level in 13 years.

The housing secretary also pointed to stalled developments as an ‘untapped area’ and will help developers ‘unlock tens of thousands of houses’.

Rent controls sparked concerns

However, Mr Alexander points to the Scottish Housing Bill’s proposed rent controls have sparked concern among landlords.

Government data also indicates that such measures have driven up tenant costs.

The Cost of Living (Tenant Protection) Scotland Act 2022, which introduced temporary rent caps, led to rent increases over two years that nearly matched the rises seen over the previous 12 years.

From 2010 to 2022, average rent increases for one, two, three and four-bedroom properties in Scotland were 31.2%, 32.9%, 34.5% and 55.6%, respectively.

The cash increases of £138, £182, £232 and £523 but from 2022 to 2024, rents rose by £130, £157, £230 and £333 for the same property types.

Scottish Government’s PRS meddling

Mr Alexander said: “These figures highlight just how destructive the Scottish Government’s intervention into the PRS was between 2022 and 2024.

“This is unmistakable evidence that interfering in the operation of a market is fraught with problems and produces unintended consequences.

“Politicians intervene in markets at their peril.”

He added: “The additional outcome has been a freezing of property investment, falling housebuilding levels, with money which had been intended to be invested in Scotland to build more properties being transferred to other parts of the UK where there is greater political and financial certainty.”

Scotland’s huge housing need

Mr Alexander continued: “If Ms McAllan is to make an impact on the staggering levels of housing need in Scotland, then she must embrace the private rented sector.

“She should not interfere in the market with rent controls and should be encouraging greater investment through policies which encourage growth over the long-term by clearly supporting a benign approach to the PRS which has hitherto been missing.

“There is an opportunity for the new Housing Secretary to put in place a 10-year plan to address Scotland’s enormous housing problems.”

He added: “More housebuilding, more involvement and encouragement of the private rented sector, more social housing, and a plan that ensures there are substantially more homes available in the future.”