Scottish landlords face ‘long term’ rent controls, government reveals

Reply to the comment left by Elizabeth Corroon at 07/09/2023 - 20:01
I'm not really sure why they voted that way...people do have a tendency to vote tactically.

Either way Scotland did vote in an extreme left-wing party.

more for tenants less for landlords, is the first minister going to pay back rents not being payed

I'm a small LL in Edinburgh. I could go on about the worsening context up here. But feeling gutted about having to seriously reconsider options with selling up, now one of them. In short, the SNP got into bed with Greens. Unofficial ambition seems to be to destroy PRS (hence reducing rental ability whilst forcing additional investments. Let's not even go into eviction bans). 2026 for next election here, three years - and no guarantee of change then. A lot of damage can be done in this time.

No escape to short term letting sector. They're being forced out by licensing scheme. Scheme process differs across all councils in Scotland. Seems to be in Edinburgh, to apply for licence you seem to have to first, apply for planning permission. PP only given if property front door opens directory onto main street. Also declined for example if property has a window overlooking another property?! No planning permission means no ability to apply for a letting licence. And its not cheap to apply for planning permission. Protests outside the Scot Parliament (ignored by Scot gov). Suspicion falling on dodgy deals with council and corporate short term let companies, who are exempt from this process. But short term lets are not my area. I explored expanding into this area but no longer due to Gov interfere.

Re PRS. I hate to think what they are concocting behind closed doors. I think they are ideologically driven ("it's immoral to be a private sector landlord"), so explicitly not listening to LLs, associated professionals. Professional bodies like SAL still trying to give sector a some form of a voice.

The value of what is happening up here is England could take the lessons learned as they watch Scottish PRS being destroyed. I hope you do take the lessons learned. I live an hour from the border and can't help wonder about moving my investment..... Although 6% ISAs and no hassles are extremely attractive too.

Reply to the comment left by Teessider at 07/09/2023 - 08:50
No, but the SNP boss is missing EVERYTHING!

Reply to the comment left by Teessider at 07/09/2023 - 08:50
You are not missing anything. Just this announcement will have put a complete stop to any new houses being built for the BTL market.
The SNP are embarking in a social experiment that has failed wherever it has been tried. Rent will be maximised over the next 12 months as Landlords do their best to mitigate against being forced to run at a loss.
What worries me is that despite Section 24, Selective Licencing, and Tenant Fees Act all causing rents to soar far higher than is necessary, the media still blame Landlords for the exorbitant cost of renting, and fail to see that it is legislation which is causing the damage.

Has the SNP done any kind of modelling of the impact of these policies? How do they think landlords are going to react? I know uber-cynics will say the Scottish government knows the PRS will collapse and that the SNP and Greens simply don't care, because they can blame landlords, whip up outraged political support and justify large tax increases to build social housing. But do they really have *no* evidential backing to support their arguments that long-term rent control is a good idea? Or perhaps they do: I'm sure a tame think-tank or academic can be paid to demonstrate that landlords will simply adjust their expectations for financial returns and it will drive out all the bad LLs who fail to recognise their duty to put social responsibility, Net Zero and identity politics ahead of disgusting, evil profits.

Why would any landlord stay in the Scottish PRS, now that long-term rent control has been confirmed? Maybe a few are hoping to just maximise rents and stick it out until the whole policy set implodes. Or are they specialist businesses that need to provide housing for their workers and can afford to provide subsidised housing, perhaps in exchange for lower wages? For anyone else, being a private landlord, no matter how much you enjoy and value it, must surely make no sense at all now?

Reply to the comment left by Jessie Jones at 10/09/2023 - 21:13
It isn't just a question that rent will be maximised over the next twelve months.

I rent in England through an agent. When I first started renting my agent advised me to consider going slightly below maximum rate in order to encourage a long-term tenant and reduce the risk of void periods. Many private landlords who rent direct and not through an agent also do this because void periods are a pain if this isn't your main business and like the majority of landlords you only have a small portfolio.

However, if an extreme left-wing government like the SNP brings in policies that stop you from applying rent increases when you need to then you need to rent at the maximum from the very beginning, especially if your property is mortgaged. And under this kind of system if your mortgage costs go up and you cannot recover them then your options are:

(1) evict tenant by whatever means possible then either sell the property or make changes to the property and rent out at a higher rent
(2) if you can't evict tenant legally then sell to someone else who is good at evicting tenants (and once you've sold whether they do this legally or illegally isn't your problem).

So there is no way that what the SNP is doing is solving anything. It will drive investment out and put rents up. Extreme left-wing governments don't care about this kind of thing because they depend upon generating crises in order to persuade the electorate to solve them. Knee-jerk politics.

I have just explained to an accidental-landlord friend that if he starts renting out his property in Scotland he needs to go in at a high rent from the outset and that this is because of SNP policy. If the SNP weren't doing this my advice would be to go in at a slightly lower rent to minimise the risk of a void period.

The SNP isn't controlling rents; it's driving them up.

Reply to the comment left by Rob Thomas at 07/09/2023 - 12:01
Airbnb no longer a viable alternative in Scotland. Both sectors are being decimated by ill-advised legislation which panders to only one side of the argument and ignores the consequences predicted by the other side who actually know what they are talking about. The PRS is already on the way out, soon to be followed by the STL sector.

Reply to the comment left by Beaver at 08/09/2023 - 10:27
Actually the SNP were a fairly reasonable left of centre party who introduced a lot of good policies, which is why they've remained in power for so long. However, in the last couple of years they seem to have succumbed to pressure from their new partners in government and lost the plot in many ways. For that matter, their partners in government used to be a more moderate and sensible party with worthy aims, but they've lost the plot too. Now we seem to be left in the depressing predicament of having no parties with any sense. But you are correct, these policies are making things worse. Why they can't see it, is beyond me.

Reply to the comment left by Morag at 16/09/2023 - 09:45
I have family and friends in Scotland. I was up in Scotland during the Covid outbreak and heard from a taxi driver who told me how much better Nicola Sturgeon was doing on Covid than Boris Johnson. The truth was that if you looked at the actual stats right at that moment the SNP were doing much worse than Westminster. And that is also true on both healthcare generally and education.

So when I heard the taxi driver I thought, "...no she's not...she's just a much better liar." But I kept my mouth shut for fear of causing offence because Scottish people are very nice.

The SNP have done things like provide free bus passes, free university tuition for young adults from (Scotland) although if the young adult is from England, then the young adult or the young adult's parents have to pay.

All these things the SNP has done are bribes that must be paid for. Bribes to bribe an electorate that is relatively trusting because it hasn't time to research the facts and to persuade this electorate that the independence holy grail will make all their dreams come true. A Scottish businessman recently said that Scotland needs to drop its rate of corporation tax to 15%. If Scotland gets independence then it will have to behave like Ireland, the "Celtic Tiger" that crashed and burned, and it will be unable to afford all those bribes.

Whilst the SNP may have started out as a centrist party it ended up being a party of the extremes because the cry of "let's bash the landlords" gets short term votes votes. It's a bribe. And in the end all parties of the extremes lose the centre ground and lose their way. Just as you can't tell Adolf Hitler from Vladimir Putin the only way that you can distinguish the SNP politicians from the Conservative Right wing is that their lies are just a bit more slick.

Historically Scotland voted Labour and the effect of Scotland voting Labour was that it had a moderating effect on the entire United Kingdom. If Labour is really smart it will understand this and avoid the extremes. Labour needs to learn from the failed SNP experiment in Scotland.