Posts with tag: renting in Scotland

Many amateur landlords in Scotland don’t understand obligations

Published On: January 13, 2017 at 10:00 am

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There are thousands of private landlords in Scotland requiring more support in order to give their tenants a better service, according to housing and homeless charity Shelter Scotland.

Assessing the first year’s work of two Oak Foundation backed pilot projects assisting landlords in the Highlands and Dundee, the charity has concluded that there are too many inexperienced landlords who do not understand their legal obligations.

Guidance

During the last year, Shelter’s private landlord support officers have given information and guidance in 542 cases. They found that most of the landlords receiving help rent out just one property.

In addition, Shelter’s investigation found that many became landlords as a result of a change in their own circumstances. The vast majority wanted to comply with legislation and to do whatever it meant to be a good landlord.

James Battye, Shelter Scotland private renting project manager, observed: ‘It is reasonable to believe that what we have found in Dundee and the Highlands may be well true across Scotland. That means there could be thousands of landlords who don’t have a full grasp of their legal responsibilities.’[1]

‘Shelter Scotland’s Private Landlord Support project has highlighted this gap in support for inexperienced landlords and is creating a template for services that would benefit them and their tenants in the future,’ he continued.[1]

Many amateur landlords in Scotland don't understand obligations

Many amateur landlords in Scotland don’t understand obligations

Expansion

The number of households privately renting has nearly tripled in size since 1999 to provide homes for 350,000 Scottish households. These include 91,000 families with children.

As the Scottish private rental sector continues to grow, it is imperative that landlords are more professional.

Mr Battye noted: ‘Many landlords are finding themselves ill-equipped for managing housing for people in relationship, health or financial crisis.’[1]

‘We will continue to provide the Private Landlord Support Service in the Highlands and Dundee until March 2018 with financial backing from the Oak Foundation. In Dundee the private landlord support officer is based within the council while in the Highlands the support officer is hosted by Lochaber Housing Association. Invaluable support is provided by both local authorities enabling the projects to reach people on the landlord register,’ he concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/thousands-of-amateur-landlords-dont-understand-their-legal-responsibilities

Rent Controls and Abolition of No Fault Evictions Confirmed for Scottish Bill

Published On: October 9, 2015 at 12:01 pm

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The Scottish Government has released its new housing bill, which will see rent controls introduced and the abolition of the no fault ground for possession.

The Private Housing (Tenancies) (Scotland) Bill will mean, if passed, that renters cannot be asked to leave a property simply because the tenancy has ended.

Landlords will not be able to reclaim their properties on a no fault ground, but must use another one of the grounds for possession.

Rent Controls and Abolition of No Fault Evictions Confirmed for Scottish Bill

Rent Controls and Abolition of No Fault Evictions Confirmed for Scottish Bill

Additionally, rent rises will be limited to only one per year, requiring three months’ notice.

The law will also give local councils the right to enforce rent controls in certain areas. This includes places where there have been excessive increases in rent prices and where there is concern about the impact on tenants and the wider housing market.

A local authority will be able to apply for rent caps, with ministers deciding the outcome. Landlords and tenants will be consulted during this process, with ministers deciding on rent controls for a period of up to five years.

Scottish Housing Minister, Margaret Burgess says: “The changes outlined in this bill will give tenants greater security and stability in their home and community.

“It will also give landlords reassurance that their tenants will treat their property as a long-term home, rather than somewhere temporary.”

She continues: “The private rented sector is changing. It is now home to a growing number of people in Scotland and we recognise there are some areas where rents are increasing significantly. It is right and responsible to give local authorities the ability to introduce rent controls in order to ease areas under pressure.

“The range of measures brought forward under this bill will ensure the private rented sector is better managed, simplified and successful, and creates a system that works for everyone.”1

The new grounds for possession are:

  • Landlord intends to sell.
  • Property to be sold by lender.
  • Landlord intends to refurbish.
  • Landlord or family member intends to live in the property.
  • Landlord intends to use the property for non-residential purpose.
  • Property is required for religious purpose.
  • Tenant is no longer an employee.
  • Tenant is no longer a student (if living in student accommodation).
  • Tenant is not occupying the let property.
  • Breach of tenancy agreement.
  • Rent arrears.
  • Criminal activity.
  • Anti-social behaviour.
  • Landlord has failed to register.
  • HMO license has been revoked.
  • Overcrowding statutory notice.

Housing charities, such as Shelter and Crisis, have supported the bill, but landlords and letting agents are concerned.

Dr John Boyle, against the law, believes it will cause disinvestment in the sector. He has also criticised the Scottish Government for introducing a bill that is not based on proper evidence.

1 http://www.propertyindustryeye.com/rent-controls-and-abolition-of-no-fault-ground-for-possession-confirmed-as-intents-for-scotland/

 

 

 

 

Scottish Rents Down as Government Plans to Enforce Rent Controls

Rent prices in Scotland have dropped, according to recent research. However, the Scottish Government plans to go ahead with rent control plans.

Scottish Rents Down as Government Plans to Enforce Rent Controls

Scottish Rents Down as Government Plans to Enforce Rent Controls

The latest Citylets Quarterly Report reveals that rents have fallen from the peak recorded in the second quarter (Q2) of £762 per month, to £757.

The data shows that annual growth has also slowed, down from 5.4% at the end of Q2 to 2.9% at the end of Q3.

Aberdeen has experienced some of the greatest declines, with prices down 6.7% on this time last year, compared with a fall of 3.8% at the end of Q2.

However, in Edinburgh, the opposite is occurring. Rents in the capital city have now increased for ten consecutive quarters, with annual inflation now sitting at 7.5%.

The change in Aberdeen’s prices may make the Scottish Government reconsider rent control plans for the city, says Citylets founder Thomas Ashdown.

He explains why: “By the start of 2016, it will be a fact that no rental property type in Aberdeen will have outperformed inflation since the onset of the credit crunch.

“I would go further to say that rents may even fall to the same levels as 2008-09, which would be a significant drop in real terms.

“It would seem that Aberdeen now represents a clear example of how the Scottish private rental sector can self-regulate.

“With so much concern in the investor community in relation to rent controls, the Scottish Government must surely want to consider whether the intended benefits outweigh the risks at this time.”1

In Glasgow, rent prices are continuing to rise gradually, up 2.2% over the year. The annual pace of growth has slowed, however, down from 4.4% in the last quarter.

Positive annual increases were also recorded in Dundee, at 1.2%.

1 http://www.propertyindustryeye.com/scottish-rental-prices-fall-as-government-presses-ahead-with-rent-control-plans/

Landlords and Agents Continue to Battle Scotland Over Rent Controls

Landlord and letting agent groups are continuing to challenge the Scottish Government’s plans to introduce rent controls and other measures.

The Scottish Housing Minister, Margaret Burgess, has suggested that the Private Tenancies Bill will be published next week.

The bill, which will be released under devolved powers, is also set to abolish the no fault ground for possession and introduce longer tenancies as ordinary.

Landlords and Agents Continue to Battle Scotland Over Rent Controls

Landlords and Agents Continue to Battle Scotland Over Rent Controls

PRS 4 Scotland – including landlords, agents, portals and investors, has lobbied the measures. It notes that 70% of respondents to the Government’s consultation on rent controls were opposed to them.

It is primarily led by DJ Alexander, Rettie & Co, Lettingweb, LetScotland, Braemore and Citylets.

The spokespeople for the group, Dan Cookson and Dr John Boyle, believe that Scotland’s private rental sector should provide long-term, stable and high quality rental accommodation for the growing tenant population. However, they believe that rent controls would “seriously undermine that aim”.

They explain: “The debate has been dominated by calls for the type of rent caps that are seen overseas without sufficient analysis of how these would work in practise to address Scotland’s housing crisis, or recognition of the harm they would do to tenants and as well as landlords.

“The debate has to be broadened out and if there is a need to set limits on rental increases, then there also needs to be the incentives for investment.

“There is much to be commended in the Government’s desire to create a more secure PRS [private rental sector] tenancy for the longer term – if this is what tenants and landlords want.

“However, the possibility of rent controls, limits on taking possession of a property after the lease expires and a one size fits all tenancy agreement are not only causing many landlords to question their continuing role in the sector, they are also a very worrying distraction.”

They continue: “Housing supply is the critical issue and only with healthy and appropriate investment in supply can the demand be met, and can Scotland build a PRS that meets the needs of households across the income spectrum.

“Advocates of rent control often cite Germany as providing both tenant and landlord with a predictable and secure relationship, therefore allowing for longer term investments.

“However, where forms of rent control exist, such as in Berlin, they have been balanced by strong tax incentives and land releases designed to promote supply and encourage private investment in the sector.

“Germany has a tax structure that is predominantly tenure neutral and mortgage lending that is stricter.

“It also has a fiscal and planning environment that has encouraged investment in new homes and tax benefits weighted towards investment in the PRS.

“Cherry picking one aspect of German housing policy and ignoring the others does not lead to better understanding or better policy.”1

1 http://www.propertyindustryeye.com/agents-and-landlords-mobilise-in-scotland-as-rent-controls-draw-nearer/

 

 

Green Party Co-Convener Calls for Fairer Housing in Scotland

Published On: September 8, 2015 at 4:47 pm

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Maggie Chapman is a co-convener of the Scottish Green Party. She is calling for a fairer housing system in the country in the wake of the Scottish Government’s announcement to legislate rent controls.

Chapman is “delighted” that Scotland will soon introduce rent controls. However, she urges that they must be “real and meaningful, and tackle the serious housing problem we face.”

Chapman explains her viewpoint: “Better housing is a fundamental part of a better society; it is hard to see how we can improve people’s health, better educate our children and have a fairer and more equal economy if we fail to offer people decent homes.”

Housing in Scotland has followed the general pattern of the UK, with many homes now being rented out by private landlords.

Wealthy property investors are experiencing “profits rising year-on-year,” says Chapman. For those renting from them, the costs of letting eats up “greater and greater amounts of people’s disposable income”.

Green Party Co-Convener Calls for Fairer Housing in Scotland

Green Party Co-Convener Calls for Fairer Housing in Scotland

The young and those on low incomes are being priced out of homeownership by spiralling prices. Renting in the private rental sector has become “the norm”. But Chapman notes, “all too often, the property for rent is cramped, expensive and low-quality”.

Scotland is now facing a housing crisis. Chapman observes that in cities such as Aberdeen, rents have surged, pricing all but the very wealthy out of the city and causing “social segregation”.

The HomeLet index shows that rents around the UK have increased by 12% in the last year. Chapman argues: “When it is cheaper than ever to borrow money, there is no excuse for this.”

She continues: “In a society where many people under the age of 35 find themselves priced out of buying a home, we risk creating a cohort of people permanently locked into high-cost housing.”

But those affected have reacted, with many running campaigns. The Living Rent movement has forced the issue up the agenda and is hoping for a serious response from the Scottish Government.

Although Chapman believes in the power of rent controls, she hopes that they are “effective”.

“That’s why I put forward a motion to the Scottish Green Party conference next month, calling for the introduction of a points-based system of rent controls,” she explains. “This would mean that rents are set at an affordable level, based on the quality, size, location and facilities in the property for rent.”

She adds: “I want increases to be limited so they don’t push tenants into poverty.”

Chapman is also addressing evictions. At present, there is a no fault ground for eviction, meaning that landlords can remove their tenants whatever their circumstances.

She says: “I want all evictions to be discretionary, so landlords must give grounds for removing someone from his or her home.”

Additionally, Chapman would like to see the regulation of letting agents.

She continues: “This boom sector mediates the market, producing a situation where they are demanding rent increases that not even the landlords want.

“In one case, I was approached by tenants whose letting agent was terminating their lease because they’d lived in the property for two years, and the agent was worried they would start treating it as a home. It turned out that the landlord didn’t want them removed. It was a ruse to put the rent up.”

Chapman concludes: “Ultimately, housing is the cornerstone of a good society. While Thatcherites may delight in the rich profiting from an unprecedented transfer of wealth from the poor, we cannot allow neo-liberal dogma to condemn the young and the poor to expensive, low-quality housing.

“We need rent controls, an end to unfair evictions, and a radical overhaul of the housing system. This decision is just the start.”1

1 http://www.theguardian.com/housing-network/2015/sep/07/rent-controls-scotland-fairer-society-nicola-sturgeon

 

 

Scotland to Introduce Rent Controls by Next Spring

Published On: September 3, 2015 at 8:46 am

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Scotland’s First Minister, Nicola Sturgeon, is set to introduce rent controls.

This news arrives after the Scottish Government’s consultation revealed that seven in ten respondents are against controls.

In this week’s Scottish Parliament’s version of the Queen’s Speech, Sturgeon revealed plans to introduce local rent controls through a Private Tenancies Bill, part of the Scottish National Party’s (SNP) legislation programme for the next eight months.

Scotland to Introduce Rent Controls by Next Spring

Scotland to Introduce Rent Controls by Next Spring

These measures have been criticised by the Scottish Property Federation.

Its director, David Melhuish, comments: “The mere prospect of rent controls could be enough to spook potential investors.”1

Thomas Ashdown, of lettings portal Citylets, explains his viewpoint: “If the Scottish Government wants to increase housing supply, then the introduction of rent controls is not the way to do it.

“The latest Citylets quarterly report on the Scottish PRS [private rental sector] shows that for the vast majority of areas, rents are barely keeping up with inflation as it is.

“Increasingly, it would seem that this new legislation would only be relevant to parts of the City of Edinburgh and, as many commentators have noted, possibly exacerbate the lack of supply in those areas.”1

A new group of letting agents and landlords in Scotland also raised concerns and called for two new different types of tenancy agreement.

PRS 4 Scotland hopes for a new flexible short-term tenancy agreement and a longer term contract for tenants wishing to stay in the same property for between five and 15 years, or even longer.

PRS 4 Scotland’s spokesperson, Dr John Boyle, says: “Scotland’s private rented sector should be providing more long-term, stable, high-quality rental options for our growing tenant population, but that aim has been undermined by low levels of house building – a critical lack of supply.

“Yet the current debate around the future of the PRS in Scotland has been focused on calls for rent controls, without sufficient analysis of how these would work in practise to address Scotland’s housing crisis, or recognition of the harm they would do to tenants and landlords in practise.

“The Scottish Government’s own consultation on these issues highlighted that 70% of respondents were against the introduction of a system of rent controls.”1 

1 http://www.propertyindustryeye.com/scotland-poised-to-introduce-rent-controls-by-next-spring/