0:02 AM, 7th September 2023, About A year ago 20
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The Scottish Government has announced plans to introduce ‘long-term’ rent controls among a raft of new housing laws that will also tackle homelessness and boost renters’ rights.
The country’s First Minister, Humza Yousaf, told the Scottish Parliament that a major new housing bill would be introduced to regulate landlords and provide funds for housebuilding.
The Bill would include rent controls and new rights for tenants, such as security of tenure and protection from eviction.
He added that £750 million would be invested in new ‘affordable’ homes, with 10% of them allocated to rural and island communities.
The Scottish government’s goal is to build 110,000 affordable homes by 2032.
As part of the Programme for Government, councils will get powers to increase council taxes on second homes and £60m will be used to buy empty properties and turn them into affordable housing.
In his Holyrood address, Mr Yousaf said: “We recognise housing costs are a key factor in determining people’s standard of living.
“During the cost-of-living crisis, this government took prompt action to introduce emergency rent caps for most private tenants and to introduce additional protections against eviction. ”
He added: “We’ve now laid legislation to ensure those measures will remain in place until 31 March next year.
“We will also introduce a housing bill to introduce long-term rent controls and new tenants’ rights and to establish new duties for the prevention of homelessness.”
The chief executive of the Scottish Association of Landlords, John Blackwood, said that while landlords will work with the government to develop rent controls, the supply of new homes is the long-term fix for the housing market.
He said: “The biggest single issue for all parts of the housing sector in Scotland is lack of supply so the focus must be on investing in more social housing and encouraging investment in both the new build and private rented sector.
“Any proposal to introduce rent controls must be done in partnership with all parts of the housing sector along with tenant representatives to make sure the final proposals are balanced.”
He added: “This measure should also be viewed as something which addresses short-term concerns until the longer-term measures needed to address Scotland’s housing crisis are implemented and shown to be effective.”
The Scottish government’s move has been welcomed by the tenants’ union Living Rent, and its secretary, Aditi Jehangir, said: “The commitment to rent controls is exactly the type of leadership we need to address the scale of the housing crisis.
“For the reforms to the private sector to work, tenants need robust legislation.
“We need a system of rent controls that protects all tenants, not just sitting ones, brings rents down, and forces up quality.”
She added: “We need better protections against evictions, clear timelines for repairs and the right to make our houses homes.
“And across all of these reforms, we need enforcement mechanisms that ensure that landlords respect the law.
“These reforms of our broken housing system are long overdue, and it is tenants who have paid the price.”
Teessider
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Sign Up8:50 AM, 7th September 2023, About A year ago
Could somebody kindly explain how rent controls will ‘tackle homelessness’? If rents were £1 per week, there still wouldn’t be any extra housing available.
It’s likely that rent controls would reduce investment in new housing. Builders would only build homes for homeowners. Buy to Let investors would disappear. So, there could be fewer houses and increased homelessness.
Am I missing something?
Churchills Tax Advisers
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Sign Up11:24 AM, 7th September 2023, About A year ago
Reply to the comment left by Teessider at 07/09/2023 - 08:50
You need to be a politician to understand these things. It's no good living in the real world!
Seething Landlord
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Sign Up11:24 AM, 7th September 2023, About A year ago
“We need a system of rent controls that protects all tenants, not just sitting ones, brings rents down, and forces up quality.”
In the real world you get what you pay for.
Rob Thomas
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Sign Up12:01 PM, 7th September 2023, About A year ago
"The chief executive of the Scottish Association of Landlords, John Blackwood, said that while landlords will work with the government to develop rent controls, the supply of new homes is the long-term fix for the housing market". Why would landlords work with government on rent controls?
Isn't it the job of the landlords association to point out what a disaster rent controls have already been in Scotland and will continue to be if extended. Rent controls destroyed the private rented sector in Britain after WWII and will do so again. Any landlord who thinks this policy can be workable for them is naive in the extreme: it's about a forced transfer of resources from landlords to existing tenants and the defacto nationalisation of the private rented stock. If politicians control what rent you charge you are effectively in the social rented business but without any of the subsidies that sector enjoys.
Rent controls will also encourage landlords to shift into other businesses such as the airbnb short let model, reducing housing supply.
Swift Kick
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Sign Up12:09 PM, 7th September 2023, About A year ago
Any system devised for the purpose of simultaneously bringing property rent down whist forcing up quality is bound to fail without the provision of a huge amount of public subsidy and support.
The famous Swedish economist, Assar Lindbeck, came to the following conclusion when tasked with analyzing such issues.
"in many cases rent control appears to be the most efficient technique presently known to destroy a city - except for bombing"
It would appear that simple first year University economics is way beyond the cognition of Scottish politicians !
In privately funded endeavors and services, the economics will always determine the final outcome.
Therefore, a severely depleted private rental sector will soon arrive in bonny we Scotland, which of course is perfectly fine, if that is your well-considered intent ?
Beaver
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Sign Up12:46 PM, 7th September 2023, About A year ago
This is just more of the usual left-wing SNP stuff that Nicola Sturgeon used to do.
My property is in England. But I have a friend who is just considering renting in Scotland. Like me his tendency would be to hold rents down slightly to encourage a long-term tenant. However, the only advice I can give him (and which I have given him) is that because the SNP have introduced controls on rent *increases* then he should go in at the highest possible rent rather than holding the rent down slightly.
Churchills Tax Advisers
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Sign Up13:10 PM, 7th September 2023, About A year ago
So, landlords have a choice - accept rent controls, whilst paying increased interest rates (non-higher rate tax deductible), paying to fix EPC ratings, paying for licences and the cost of meeting the licensing requirements and facing the possibility of a defaulting tenant and having their property wrecked and it taking a year to get them out, while at the same time property prices are falling
OR
Sell their properties and stick the proceeds in a savings account at up to 6%pa.
Not a particularly difficult choice, especially for those wanting a secure income in retirement, and to be able to easily move funds around to mitigate Inheritance Tax!
Juan Degales
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Sign Up13:13 PM, 7th September 2023, About A year ago
This is a case of blinkered political ideology overriding economic logic.
It’ll end badly.
Rob Thomas
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Sign Up13:33 PM, 7th September 2023, About A year ago
Reply to the comment left by Beaver at 07/09/2023 - 12:46
I'm rather surprised you would advise anyone to invest in rented property in Scotland with permanent rent controls in prospect. The whole point of rent controls is to given sitting tenants a better than market deal by squeezing landlord returns. As a landlord you become the dummy forced to take sub-market returns by government edict.
Just to recap for those who aren't familiar with the history of rent contols in the UK, between 1939 and 1957 private rents were frozen by law. During this period prices rose 171%. Many landlords couldn't even afford repairs because their rent had fallen so far in real terms.
I have some advise for Scottish landlords - get out as soon as you can.
Elizabeth Corroon
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Sign Up20:01 PM, 7th September 2023, About A year ago
Reply to the comment left by Beaver at 07/09/2023 - 12:46
In all fairness the Scottish people thought they were voting for a political party to secede from the Union. In practice the Scottish people have voted in extreme left wing politicians, obviously Putin's pals. The long term objective being to convert all of Scotland to the creation of a massive Easterhouse development. Then again these politicians are the people's elected leaders, so be it.