Landlords concerned

Housing reforms ‘risk making situation worse’

Patrick Harvie
Patrick Harvie: this will be good for tenants and landlords (pic: Terry Murden)

Moves to protect tenants and reduce homelessness could have the opposite effect by driving investment and landlords out of the market, say critics of a new Scottish housing bill.

The measures introduced to parliament by tenants rights minister Patrick Harvie and housing minister Paul McLennan propose long-term rent controls that could shackle landlords with price caps for up to five years.

The Housing (Scotland) Bill provides new rights to keep pets, decorate rented homes and stronger protection against eviction.  

Mr Harvie said: “A fairer, well-regulated rented sector is good for both tenants and landlords. Tenants benefit from improved conditions and security, while good responsible landlords will thrive when their good practice is recognised by regulation.

“Scotland has led the way across the UK in improving the experience of people who rent their homes and this reform has been at the same time as significant growth in the size of the private rented sector. 

“So progressive reform can lead to better conditions and a healthy rented sector overall. I want to keep working with both tenants and landlords to achieve that goal.”

However, evidence points to rent controls being abandoned in other places where they have been introduced because they distort the market, push up prices and reduce housing investment.

John Blackwood, chief executive of the Scottish Association of Landlords, said: “Despite the hype and promises from the Scottish Government, it seems these proposals will do nothing to help either tenants or landlords in the private rented sector.

Landlords would face tougher controls (pic: Terry Murden)

“The rent control proposals, as has been seen in places like Ireland which has similar measures, will see reduced investment and more landlords leaving the sector, leading to higher costs for tenants.

“The effects of Scottish Government policies in the PRS are already being felt, with rising costs reducing supply and placing more pressure on council and housing association properties that they are struggling to cope with.

“As landlords have said for a number of years, what is needed is a coordinated plan to build more social housing, encourage more investment in private renting and the building of more owner-occupied homes.

“The approach outlined in this legislation will exacerbate Scotland’s housing crisis and make it harder for people to have the quality home they deserve, in a place they want and at a price they can afford.”

David Melhuish, director of the Scottish Property Federation, described the legislation as a “disappointment” for anyone seeking to bring build-to-rent properties to Scotland and warned that “we risk repeating the damaging effects of the emergency rent freeze legislation passed in 2022 when investment for Scottish rental housing was frozen, deterred or diverted to projects outside of Scotland.”

He added: “We estimate that there is currently between £2.5 billion and £3 billion of investment now at risk that could deliver quality new homes for rent in Scotland.”

A rent freeze for tenants and a ban on evictions was introduced by Holyrood during the Covid-19 pandemic, later extended into a cap on rental prices. Despite the cap, there was a loophole and rents continued to rise as demand exceeded supply.

David Alexander, chief executive of the property group DJ Alexander, said: “Once again rent control areas are being proposed without evidence that they have ever worked anywhere in the world.

David Alexander
David Alexander: no evidence that rent controls work

“The recent experience in Scotland of the rent cap introduced in October 2022 has resulted in unprecedented demand and rents rising at their fastest ever rate, and a housing sector that is in crisis with four local authorities having said they were experiencing a housing emergency.”

Even the head of homeless charity Shelter was critical of the bill and pointed to its shortcomings in tackling the key issues.

Scotland director Alison Watson said: “There is a growing consensus that Scotland is in the grip of a housing emergency. Already four local authorities have declared housing emergencies, with more expected to follow in the coming weeks.

“Today’s housing bill was an opportunity to address the causes of that emergency and end the scandal of 10,000 children trapped in temporary accommodation.

“What we need is urgent action to drive up the supply of social homes, investment in local services and stop to councils breaking existing homelessness laws.

“Instead, we have a housing bill that does none of that and risks diverting frontline staff from the task in hand. By proposing new additional duties on councils already failing to deliver existing laws, we run the risk of making the situation worse.

“It is time for Scottish Ministers to listen to what our communities are telling them – declare a housing emergency and bring forward a new plan to deliver the social homes we need.”

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