0:03 AM, 11th March 2024, About 9 months ago 7
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The Scottish Government has published the results of a public consultation on its New Deal for Tenants proposals and found that, unsurprisingly, most tenants support rent controls – while landlords have hammered the idea.
The publication of the responses makes clear some puzzlement over the negative response from landlords about the proposal to prevent rent increases in between tenancies.
Another problem was that the survey offered ‘closed’ questions and landlords complained that they wanted to give fuller answers.
As a result, the government has published a separate document of these responses.
Most respondents – three out of five – expressed a view on rent controls in Scotland with a ‘considerable majority of those (around 9 in 10), including most of those who identified themselves as private landlords, noted their opposition to the introduction of rent controls’.
There’s an acknowledgement that rent control proposals are ‘already leading to landlords exiting the sector, and that this trend will continue’.
Most landlords who said this also warned they are in the process of selling up and will leave Scotland’s PRS.
The publication adds: “Respondents stated that since rent caps have been introduced, private rents in Scotland have risen faster than anywhere else in the UK; it was felt that the decision to pursue a policy of rent control fails to address the shortage of rental housing, and that this shortage is exacerbating rent inflation.”
Landlords in Scotland also there would be little or no incentive to improve rented properties with a rent cap in place.
To do so, landlords need to increase rent.
The publication highlights: “There was also reference to stifling investment in new, better quality, more efficient rental housing and in renovating and decarbonising existing rental housing.
“In addition, it was argued that there has been no consultation on the type and nature of any controls, or any examination of the options available, and it was suggested that there is a dearth of information on how rent controls would work in practice.
“For example, it was observed that the questionnaire asks respondents to select a preference for local or national rent control, yet no information is provided as to the data on which Scottish Ministers or Local Authorities would be basing their decisions.”
The report goes on to say there was a ‘considerable majority’ of respondents opposed rent controls but some landlords supported the ‘general policy direction’.
Those landlords said a ‘universal system’ with the twin aims of improving quality and affordability was needed but that there should be local aspects to reflect conditions and realities.
Landlords also said there was an accurate picture of rent inflation/deflation or affordability needed before any form of rent control is introduced – and its impact needs to be monitored.
Scottish politicians are also warned in the report: “There was also a concern that the period between the end of the CoLA rent cap and the introduction of rent control could lead to a wave of evictions and rent increases.
“There were associated calls for the rent adjudication system to be reformed, including for rent increases to be measured in terms of inflation, or a set number linked to government inflation targets, rather than in relation to open market rent.”
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Monty Bodkin
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Sign Up6:55 AM, 11th March 2024, About 9 months ago
https://www.property118.com/private-rents-in-scotland-soar-by-14-3-in-a-year/
Private rents in Scotland soar by 14.3% in a year
Cider Drinker
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Sign Up10:11 AM, 11th March 2024, About 9 months ago
What the government seems to miss is that if house prices remain stagnant and inflation averages 5%, for a property costing £200,000, the first £10,000 of annual rent only covers inflation. If the property is mortgaged, the first £12,000 would cover the mortgage.
Add on the impact of Section 24, maintenance, repairs, insurances, agents’ fees, legal fees for when things turn nasty, potential void periods and risk (house prices are likely to fall/tenants are likely to miss rent payments) and it becomes clear why some landlords are leaving the sector and that other landlords really should be reassessing their exposure to risk.
Rent controls are a significant risk. If landlords are forced to make a loss, they will struggle to survive and some will declare bankruptcy.
The problem, as always, is over population and too few houses - neither of which are in the landlords’ court.
Jireh Homes
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Sign Up11:07 AM, 11th March 2024, About 9 months ago
Of interest is the following comments in the Executive Summary - which may be read to imply Scottish Government are going to ignore the findings from the Consultation and plough on with proposals irrespective of feedback!
"It is important to note that the views of respondents do not necessarily represent those of the wider population of interest. As with any engagement exercise, the questionnaire respondents are a self-selecting sample, and individuals and organisations who have a keen interest in any given topic, who hold strong views, and who have the capacity to respond are more likely to take part.
It should also be noted that the available routes for disseminating information about the questionnaire may have had an impact on the profile of respondents. For example, a link to the questionnaire was included in an email sent directly to all landlords on the Scottish Landlord Register, but there was no equivalent route for sharing information with tenants. This may explain, at least partly, the relatively high proportion of respondents taking a landlord perspective.
Given the dissemination routes available, the self-selecting nature of the sample and the low numbers of respondents in some groups (both in relative and absolute terms), the results set out in this report should be seen as indicative rather than significant. This applies particularly in terms of the proportions of each respondent group (presented as percentages for the purposes of this report)"
https://www.gov.scot/publications/rented-sector-reform-landlord-tenant-engagement-questionnaire-analysis-report-3/
Lee Bailey
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Sign Up14:57 PM, 11th March 2024, About 9 months ago
Until they cap bank of england interest rate rises, then any capping of free market rents its a clear and false distortion of true inflation.
Interest rates at BOE level changed from 1% to 5%, a 400% increase. No one in the media or councils do a damn thing about that.
This whole crooked country NEVER tackles the true problems, it only ever hits the symptoms.
Nick M
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Sign Up16:53 PM, 11th March 2024, About 9 months ago
Reply to the comment left by Jireh Homes at 11/03/2024 - 11:07
There are considerably more tenants than landlords. So you would expect, if both groups were equally engaged, the tenant responses would dominate in numerical terms. They haven't
My reading of this is that tenants are not convinced. This summary implies that tenants were not aware of the consultation. This is unlikely as there are many campaign groups, media reports and others making them aware. And why not say "yes, we'd like lower rents"
The tenants have likely seen that steps so far haven't helped many - and that prices have risen and availability dropped. That's why tenants have been so quiet. They are not convinced
Meanwhile, most landlords say it won't work
I don't think the Scottish government will listen. Looking on from England, it is helpful as evidence of why rent caps have undesired consequences. Yes, all seen elsewhere in the world too, but a local lesson now too.
Labour has said no to rent caps in England. I don't believe them so am increasing rents to tenants significantly to slightly below market rate. The Scottish government's actions, and this proposal about limiting rises between contracts, have led me to make this increase. While I can take short-term risks to help tenants, I can't subsidise them or future unknown tenants forever which this proposal asks to happen......
Southern Boyuk
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Sign Up5:48 AM, 12th March 2024, About 9 months ago
To our Scottish landlords, you will not win by lobbying the Scottish gov have made their agenda and will not move. Sell 30 % of your properties to send a clear message, then another 20% if not heard. If the gov listens not- get out of the residential mkt and have a less stressful life.
Michael Booth
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Sign Up14:00 PM, 12th March 2024, About 9 months ago
What dont the idiotic politians understand rent caps equal higher rents.