A property portal has taken the unusual step of warning politicians about the dire impact of rent controls on the private lettings sector.
Lettings portal CityLets, which operates chief in Scotland, has been measuring the impact of various degrees of rent controls exerted in Scotland over the past two years.
Temporary legislation supplanted the expired emergency legislation at the end of Q1 2024 which provides for controls within tenancies and a rent rise cap of up to 12%.
New rents on the open market continue to operate freely however proposals in the new Housing (Scotland) Bill now before parliament seek to introduce rent pressure zones in local, over-heated markets.
Commenting on this Gillian Semmler, PR Manager at Citylets, says: “Plans to extend controls in Scotland’s private rented sector will again have good intentions however these must be realistically and responsibly weighed up against the impact on rental supply.”
And Citylets managing director Thomas Ashdown comments: “Rents in the open market of the Scottish Private Rented Sector appear to be easing in many locations suggestive of a market now returning to better balance after what may transpire to be multiple but transitory market distortions set in motion by the pandemic.
“Reported cessation of large scale projects, poised to add significant new supply of rental homes, would be rather unfortunate especially when it is wholly unclear as to where else they will come from.”
More generally the pressure on rents for new tenancies in Scotland’s private rented sector has started to ease with all major cities now reporting single digit annual growth.
And Adrian Sangster of high profile Scottish agency Aberdein Considine adds: “In Scotland’s dynamic letting market, recent changes to rent cap rules have grabbed attention. While such regulations aim to balance tenant rights and landlord returns, demand continues to surge, eclipsing available supply. Despite this, a silver lining emerges for landlords, with stagnant property prices and escalating rents yielding attractive investment prospects.
“Amidst this landscape, prudent landlords find themselves in a fortuitous position, as the market’s dynamics offer an opportune moment for acquisition. With rental yields on the rise, the Scottish letting market remains a compelling arena for landlords to navigate, presenting both challenges and promising returns in equal measure.”
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They’re following the wef agenda , you seriously don’t expect them to have coherent thoughts themselves do you .?
There is a dysfunctional letting market in Scotland and in England and that was pointed out yesterday by a peer in the House of Lords debate in relation to the upcoming Renters Reform legislation. He argued for fixed term tenancies stating that the Renters Reform Bill had gone beyond the manifesto commitment to end Section 21 and what was proposed in the legislation would further reduce supply which we all know leads to higher rents. The letting market was going to become even more dysfunctional as a result of the Renters Reform legislation as it currently stands. He hoped that some of his colleagues in the House of Lords would join him at the Committee stage in the House of Lords to formulate an amendment to the Renters Reform Bill allowing for fixed term tenancies. Of course, even if they do that there is no guarantee that the Goverment will accept it.
However, it was also pointed out by another peer that there is a problem with the student ground as many courses do not conveniently finish at the traditional end of the academic year, and that is often the case with Masters degrees. The Government proposals therefore risk student tenants being turfed out half way through their course. The obvious solution is to allow fixed term tenancies in certain circumstances, and not rigidly adhere to the periodic system of tenancies which is going to have a dire effect on the private rental sector anyway as so many small landlords exit in the near future.
Labour peers were not happy with the delay in ending in Section 21 and recognised though that that situation would change with a Labour Government.
The solution to all of this is to end Section 21 for new tenancies as the Bill receives Royal Assent and to allow for the existence of new-style fixed term tenancies at the same time.
Your comment about Masters courses is interesting. I agreed to a 12 month tenancy agreement for Masters students this year instead of the standard 11 month contract. I knew it was going to make September difficult for the new batch of tenants but the university had insisted it was a 12 month course and it would finish in September. Now the tenants have told me the course has finished already. One of them was delighted when I found a new tenant to take her room from 1st August. She's homesick and it enables her to go home 2 months early without her parents getting upset. Another one has asked to leave a month early to go travelling, which suits me fine and allows proper time for any redecorating of that room. The third one has just paid the final 4 months rent so I guess she's staying for the full year. The university are bringing the next batch of Masters students in 2 days before the current tenancies should have ended so they clearly haven't thought through the logistics.
I thought that the Peer was right about student lets. Post-graduate degrees do frequently have different end dates.
The situation is a mess because it is not clear what Labour will do about the legislation if they take power. They have said that they will build on it.
For anyone imminently considering letting to students for the next academic year it might be wise to issue them with a notice beforehand saying that you intend to invoke the right to terminate the tenancy at the end of the academic year and get them to sign that. However, there is no guarantee about the student ground. The Government will have to consider amendments from the House of Lords in relation to it.
The other way to let to students still is to offer them a serviced flat with a cleaner. That way you can still have a fixed term. That might be a possibility while there is so much uncertainty about the legal situation regarding tenancies.
I would've thought Masters students could just be treated like young professionals. They don't generally want to live in big groups & certainly not with undergrads!
Another recent development is the publication of the Labour commissioned report by Stephen Cowan, stating that so called "back-door evictions" should not be allowed. The meaning of back-door evictions is a landlord wishing to sell or move themselves or a family member in. The report states that those should NOT be grounds for ending a tenancy.
If you can’t sell, that’s ‘sequestration’ or state sanctioned theft. This is now a real danger and predicted by many contributors here.
Sell, sell, sell and now!
I think you are right AJR.
I imagine that they want landlords to sell with tenants in the house, and preferably sell to the tenants at a substantial discount.
It will be like it was in the 1970’s - landlords selling properties with sitting tenants at half market value. So it will be an attractive proposition for tenants to grab themselves a bargain. Also there was quite a bit of sub letting going on. Section 21 was introduced to encourage investment and increase supply which of course it did. Without being able to sell your property there will be no new investment whatsoever.
I don't think they want any more investment from small landlords.
There is a ruthlessness about what will happen to existing tenants now as Landlords seek to protect their interests before Labour take power.
The Government has made a complete mess of the private rental sector and Labour seeks to build on the mess and make it worse.
Rent controls push up rents, as Scotland have already seen.
Ellie - couldn’t agree more. V true -Nic- Rent controls don’t work Scotland has shown. So WHY they keep pushin it. It’s a case of all the quangos telling the gov what they want and it happens- Blind Telling the Blind. Not talking with us Landlords- AGAIN!
It is a hopeless situation for both landlords and tenants. As you say, too many people with too much to say and actually quite ignorant about the consequences of what they are saying.
True - and it’s wilful blindness because the evidence is there to be seen for those who choose to look, but they all just look away because the facts don’t fit their focus.
I notice the BBC News have posted yet again another person being made homeless because the landlord has served a Section 21 notice and sent in the bailiff to evict her. They have highlighted a 57 year old grandmother who is now sleeping rough as the Council do not view her as a priority. Further on in their article they state Section 21’s have increased by 49 percent since 2022. Can they not join up the dots?! I suspect her previous landlord is selling up as he/she doesn’t want a sitting tenant on rent control. The grandmother states in the article the Council gave her a list of private landlords none of whom were willing to accept her because she was on benefits. This is hardly surprising because the landlords don’t want the expense of taking her to court etc. I am sure the Corporates won’t be prepared to be social housing landlords especially if they can’t evict without huge expense.
Chickens are coming home to roost.
So the landlord had a very good reason to evict her
It's hard to see how she doesn't qualify for at least temporary housing. Something is very wrong if the council are telling her to sleep on the streets!
Let's just remind ourselves that the English Housing Survey consistently reports >80% of tenants are happy with their LL. Just who are all the tenants the tenants' groups are representing?
what has the fact that she is 57 and a grandmother got to do with anything? 57 isn't old and at that age she should still be working
I’m older …. And I am 😄😄
She ended up at her daughter’s, but the two-bedroom flat is already overcrowded with two adults and two children, plus Heidi’s adult son who was made homeless alongside her. so that is TWO non-working adults!
Her most recent job, working in men’s formalwear at House of Fraser, ended when the branch closed in 2020. So not able to find a jon in four years? In my working life, whis is still ongoing, of fifty seven years and counting, I have been unemployed for one week and then two months.
Without rent control more income tax for landlords to pay into the treasury coffers! These tenant groups think the government have a money tree. They don’t - social housing is funded from taxation.
The governments decision to turn the PRS clock back to the 1970/80s seems to be causing the sxxt to start hitting the fan but there's likely to be a lot of misery for landlords and tenants made homeless before any future government dares admit what a catastrophe the Renters reform bill has been.
Spot on David!
Same old carrot, none of their Business whether we want to Sell, Keep or do anything else with our Property, do they think it’s theirs or am I wrong and now it is theirs looking more like it every day.
We did need their advice when we bought the property or get any financial support for them so what now gives you the right to tell us what to do, how dare you.
Why should Students get rights over anyone else they are already milking the tax payers whether they are going for degrees or masters is nothing to write home about. They have every advantage and pay no Council Tax while working people of similar age have to pay the lot.
What’s so special about degrees those are the very people now making the rules that have destroyed us. I have come across some that are HMO inspectors creating homelessness and costing me thousands with their nonsense interference, don’t bother to read your license application but keep asking for all the stuff that you already supplied in the first place, is this what students learn.
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