Posts with tag: Scottish rent controls

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/

 

 

Scotland to Introduce Rent Controls by Next Spring

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

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Categories: Landlord News

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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/