Agents and landlords mobilise in Scotland as rent controls draw nearer

Agent and landlord groups remain on a collision course with the Scottish Government over its plans to introduce rent controls and other measures.

Scottish housing minister Margaret Burgess has indicated that the Private Tenancies Bill will be published next week.

The Bill, to be published under devolved powers, is also set to ditch the ‘no fault’ ground for possession and introduce longer tenancies as the norm.

Lobbying on these issues is PRS4Scotland, an alliance of agents, landlords, portals and investors. It points out that 70% of respondents to the Government’s own consultation on rent controls were against them.

It is led principally by DJ Alexander, Rettie & Co, Lettingweb, LetScotland, Braemore and CityLets.

Dan Cookson and Dr John Boyle, spokespeople for PRS4Scotland, said that Scotland’s private rented sector should be providing long-term, stable and high-quality rental options for the growing tenant population.

Rent controls, however, would “seriously undermine that aim”.

They said: “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 practice 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 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.

“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.”

They added: “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.”

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