PropertyMark warns of dangers of rent freeze

Propertymark says there’s already been a decline in the number of homes available for rent in Scotland because of rising costs levied on landlords.And it says any form of rent control in the short and longer-term will mean more landlords selling up and even fewer and lesser quality rental homes.Emergency legislation containing a private sector rent freeze is being debated by Scottish politicians this week. The Tenants’ Rights minister in the Scottish Government – the Green Party’s Patrick Harvie – says: “The cost-of-living crisis is an emergency situation demanding an emergency response. Even as energy, food bills and other day-to-day basics become more expensive, today’s legislation freezing rents and protecting tenants from eviction will give tenants stability in their homes and confidence about their housing costs.”

If approved by Scottish members of parliament this week, the Cost of Living (Tenant Protection) (Scotland) Bill will give ministers temporary power to cap rents for private and social tenancies, with this cap set at 0% – effectively freezing rents – until at least March 31 2023, and possibly for a year even beyond that.Enforcement of eviction actions resulting from the cost crisis will be prevented over the same period except in a number of specified circumstances.But Propertymark’s head of policy and campaigns Timothy Douglas has told Members of the Scottish Parliament that letting agents and their landlords had supported tenants through the hardship the pandemic.

Douglas said: “The data from one of our largest member agencies who manage just over 3,000 tenancies across Scotland shows in 2021 they issued 16 notices for arrears but 66 for landlords selling and in 2022, up until September, there were 18 for arrears and 69 for selling. 

“Landlord selling notices are up from 33 in 2020. All roads lead back to supply and selling is one of the exemptions proposed in the legislation.

“It needs to be acknowledged that throughout the pandemic and beyond letting agents and landlords have worked extremely hard to maintain tenancies and keep tenants in their homes. For example a letting agent in Glasgow paused all rent increases, some landlords withdrew all rent charges or reduced amounts that were owed, and they have capped increases at five per cent for two to three years which they think is a reasonable response.

“Agents as a whole are not bartering on rent prices or offering to the highest bidder, they are checking at length a tenants’ affordability and trying to be accommodating and find solutions as best as possible.

“We must remember the environment in which private landlords are operating in: higher costs to buy-to-let through the additional surcharges that have increased; higher interest rates; higher tax on rental income; they can no longer offset interest mortgage costs; changes to the wear and tear allowance; the removal of mandatory grounds for possession; the impending energy efficiency costs. All these things are playing into the cost factor for private landlords going forward.”

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