Squeeze on landlords
Rent freeze ‘a cover for housing policy failure’
Scotland faces a worsening shortage of rental homes after landlords announced they were removing property from the market in response to the First Minister’s rent freeze.
One housing association boss said he had been “inundated” by angry landlords after news broke earlier today of the government’s plan.
Another lettings agent accused Nicola Sturgeon of scoring “cheap political points” by imposing a rent freeze on landlords to cover failures in her government’s housing policy.
The Scottish Property Federation revealed that a multi-million pound investment into the sector has been put on pause.
A freeze on private and social housing rents was included in today’s Programme for Government announced to MSPs at Holyrood. There will be a moratorium on evictions. Both measures will remain in place until March next year.
Ms Sturgeon said she could not stop energy bills rising but she could ensure tenants “had a roof over their heads”.
The move is likely to be supported by Labour which has called for similar action to help tenants on low incomes cope with the cost of living crisis. There have been further calls for it to be extended to student accommodation.
However, David Alexander the chief executive officer of the lettings firm estate agency DJ Alexander Scotland, said: “The announcement by the First minister of a rent freeze for tenants in the private rented sector tells you all you need to know about the Scottish Government’s commitment to consultation and fairness.
“With the burden of the cost of the freeze being placed upon landlords the First Minister seeks to gain cheap political points whilst not addressing the fundamental failings of her own government’s housing policy.”
He added: “No government would tell supermarkets, pubs, or clothing manufacturers to freeze the cost of their goods, but it seems that Nicola Sturgeon and her colleagues believe the private rented sector is fair game.
“The result of this policy will be a shrinking of the private rented sector at a time when demand is at its highest. This has come at a time when local councils are seeking help from the private rented sector in housing the homeless as they have no capacity within social housing.”
Mr Alexander said the policy “underlines how inadequate the response of the Scottish government has been to delivering homes for the people of Scotland.
“This move marks a new low in the Scottish government’s relations with the private rented sector and, given that this has been done without consultation, is a sign of desperation at a time when we need considered thought and action.
John Blackwood, chief executive of the Scottish Association of Landlords, said: “Since rumours of this announcement broke this morning, I have been inundated by landlords saying they will be removing their vacant properties from the rental market, and I don’t blame them.”
“Who on earth is going to let a property in the knowledge that they will be unable to meet their own financial and maintenance obligations if their tenants don’t pay the rent or their outgoings increase?
“Instead of helping tenants pay their bills, the Scottish Government has chosen to penalise people who have provided the homes politicians have failed to provide for decades.
“Once again the Scottish Government fails to grasp the reality of Scotland’s housing crisis and has chosen the easy option of attacking landlords for political reasons which will only further reduce the supply of housing, putting more people at risk. This is not a solution, it will only cause more hardship.
“In just a few weeks, we will see more stories of students and others who can’t find suitable accommodation. We warned of this last year and nothing was done but no one should be in any doubt where the blame for that new crisis will lie. It will be at the door of Bute House.”
Scottish Property Federation director David Melhuish said the rent freeze “will do nothing to address the wider challenges of supplying enough homes for people to buy or rent.
“If anything, this policy threatens to derail efforts to improve the supply of new, purpose-built homes for rent as investors pause to ask what else the Scottish Government might be prepared to do.
“Private rental sector providers have endured years of restrictive measures that have led to the sector losing homes for rent, with both renters and providers forced into using a tribunal system that is simply overrun.
“Already since this announcement we are aware of a multi-million pound investment that has been put on pause.”
Sarah-Jane Laing, chief executive of Scottish Land & Estates, said: “The rent freeze announced by government is likely to compound the existing structural and supply problems with the private rented sector, and may impact on required investment in energy efficiency measures.
“Rural estates provide a huge supply of affordable housing, often significantly outstripping supply from councils and housing associations.
“The ban on evictions also seems a disproportionate response given that approval already needs to be provided by a tribunal which takes full account of tenants’ personal circumstances.”
There are currently 132,000 people on the social housing waiting list, but only 1,000 more social housing homes available now compared with when the SNP came to power. He claims more houses (6,972) were built for the social sector in Scotland by the Thatcher government compared to the current SNP administration, a number which is disputed by the government which described the data as “entirely inaccurate”.
Labour leader Anas Sarwar has previously called for an emergency rent freeze to be introduced immediately after MSPs return from Parliament’s summer recess.
Under the plans set out by Sarwar, the freeze would be in place for nine months, with an option to extend the policy for up to two years.