Scottish landlords exploit SNP rent control loophole to increase rents

Scottish landlords exploit SNP rent control loophole to increase rents

0:02 AM, 11th April 2024, About 3 months ago 11

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Scottish landlords are capitalising on a loophole in the SNP’s rent control laws, leading to a 12% increase in rents, the Daily Telegraph reports.

The rent cap legislation which restricted rent rises ended on March 31.

However, new plans to bring in permanent rent controls are not expected to come into force until 2025, following a consultation.

This gap has seen landlords raising rents as they scramble to cover spiralling costs.

The move follows Scottish tenants seeing the highest rent rises of 11.6% – the highest in the UK.

Despite the rise, tenants’ rights minister Patrick Harvie has defended the rent cap saying ‘thousands’ of tenants have been helped.

Nicola Sturgeon first capped rent rises at 3%

Scotland’s former first minister, Nicola Sturgeon, first capped rent rises at 3% and placed a pause on evictions in 2022.

The law didn’t cover new tenancies which is when landlords put rents up.

Last month, Humza Yousaf’s SNP-Green government published radical new plans to bring in new longer-term market controls.

This would see local authorities getting powers to create rent caps as low as 0% for up to five years.

Other proposals include allowing courts to delay evictions during the winter months or where they cause high levels of stress.

The new rules would also prevent landlords from ‘unreasonably refusing’ pets or requests to redecorate.

Enact the new rent control legislation by the end of 2025

The Scottish Government says it wants to enact the new rent control legislation by the end of 2025, but industry experts say the plans will reduce investment in Scotland’s PRS.

It will also force more landlords to sell up, they claim.

Michael Lawson, who owns 75 properties in Fife, told the Telegraph that he had issued 26 rent increase notices of ‘between 8% and 12%’ for existing tenancies on April 1.

He said: “All landlords are doing this. Landlords like me just can’t make a return.

“We try to make £300 a month per property but now we’re struggling. Some will be making £100 a month now, and it’s not worth the faff.”

Considering selling 20 properties

Mr Lawson said he was considering selling 20 properties in his portfolio, a move he believes will be bad for tenants.

He explained: “This will mean people not having a home.

“It’s a zero-sum game as that property will stay in the housing stock, but will it stay as a rental?

“Why would anyone invest in it? You can’t be heartless, but you have to work pragmatically.”

He added: “The government is constantly shoving new legislation down our throats. It’s exhausting.

“They have a vendetta against landlords but also a total misunderstanding of how the sector operates.”

Landlords were taking the opportunity to increase rents

The chief executive of the Scottish Association of Landlords (SAL), John Blackwood, said landlords were taking the opportunity to increase rents after their costs ‘sky-rocketed’ over the past few years.

He points to rising interest rates, inflation and increased regulation.

Mr Blackwood told the Telegraph: “From a recent survey of our members, respondents reported that one in ten let properties are no longer financially viable as the costs to run these properties are far in excess of the rents being charged.”

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Neil Robb

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10:02 AM, 19th April 2024, About 3 months ago

All we see is Scottish rents rise higher than anywhere else. It does not mention the two years where they could not rise.
Or they were already a lot lower then the rest of the UK.
A 5% rise on a thousand pounds rent is £50 . A 10% rise on £500 is £50.

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