Scotland to freeze rents

Scotland has announced that it will freeze rents until Spring in a bid to mitigate the impact of rising energy bills.

First Minister Nicola Sturgeon has announced that the government will table emergency legislation to freeze rents as well as ban evictions during the winter period.

Sturgeon said “we will take immediate action to protect tenants in the private and social renting sectors”, while she called for action from UK ministers “on a scale similar to the Covid response”.

Landlord groups typically oppose controlling or freeze rents, saying such a policy would result in investors leaving the market, depleting housing supply.

Tom Mundy, chief operating officer at Goodlord, said: “This rent freeze represents a potentially seismic new frontier in UK lettings policy.

“While we understand the need to support tenants, introducing rent control could mark the end of the private rental sector as we know it by stripping away the central incentive which encourages people to invest in buy-to-let properties.

“There’s a major risk that this freeze will push landlords out of the PRS market at a time when pressure on rental stocks is particularly acute.

“This will squeeze the whole lettings market and create bigger headaches for the Scottish government later down the line.

“Long-term, it could serve to stymie all future investment in the space and fatally undermine the system.”

Sturgeon has written to the new Prime Minister Liz Truss, requesting a four-nation meeting of political leaders to focus on helping households.

Meanwhile she announced that the Scottish child payment will be upped from £20 to £25 a week from November.

Curiously this rent freeze announcement comes only a few months after a similar proposal by Scottish Labour, to freeze rents for two years until introducing rent controls in 2024, was voted down by the SNP and Scottish Green MSPs.

Timothy Douglas, Head of Policy and Campaigns at Propertymark, said: “It is not only tenants who are exposed to the effect of the cost-of-living pressures and as a key housing provider, private landlords will be asking what help they can expect to manage any additional costs they may have to bear as a result of today’s announcement.

“Furthermore, it’s unfair to suggest letting agents and their landlords will be routinely increasing rents at a time when many tenants are facing a further strain on their finances. All parties will need to continue to work together.

“We know the Scottish Government is committed to a system of rent controls and is already considering a ban on winter evictions. What’s most alarming is that this feels like déjà vu with the potential for these new temporary protections to become permanent as has been the case with others introduced during the pandemic.”

Simon Tillyer, chief executive of Vouch, said: “This is a huge step from the Scottish government. It could be the first towards a fundamental re-write of what the UK lettings market looks like.

“At a time when too many landlords are already leaving the market and there are more tenants than there are homes available to rent, we should not be taking steps that will drive even more landlords away from the PRS.

“I wouldn’t be at all surprised if this is the final straw for landlords and sparks an exodus. This policy risks creating more problems than it solves.”

Comments 3

  1. Well said WIll2.

    They doing it again. Look what happened in Covid calling for Rent Holiday & no evictions etc.
    We people that actually rent houses out, knew Landlords would be selling in their droves when they could after hearing stuff like this & tenants would then be worse off-And that’s what happened.
    Remaining Landlords now have mega demand & can charge what they like.

    These people in power who change sensibility make it better for that current tenant temporarily, but the next 100,000 looking for a house or move cannot do so, as no Landlord takes them or if they can, super expensive rents. It’s getting a case where only the well paid can afford to rent. All Govt & Council & Shelter & Generation Rent making.

    Shelter will applaud this & say it is working-As above for the current tenant. I’d say it works more for the Landlord & Letting Agent that slugs it out, as when the freeze or ban over, we all know rents shoot up massively as more demand comes. Letting Agents are loving the higher commission from higher rents. And why shouldn’t they.
    And us Landlords then end up taking it out of the innocent tenants by increasing the rents at every opportunity as we just don’t know when the next attack is coming. And we think we got a rent freeze coming again, we think Gees, best get some higher rent in now even though I was happy to leave at that existing rent to keep tenant happy.

    And before Generation rent shoot me down, I want rents to reduce so my tenants can have a choice to move, so I can sell my ruddy houses.

  2. I heard that somebody in the Scottish Parliament praised this move as genius as it won’t cost the Scottish Government a penny. The losers will be those rich evil landlords, who of course, deserve to be punished. Compensation for them? You must be joking, they can afford it, they might have to sell the odd roller or the yacht but they will manage, serves them right for being so greedy!

    You think we won’t get something similar in England? Maybe we won’t get the full Monty as in Scotland but I am sure something is coming and soon, especially as Liz Truss says she will act quickly and she surely does not want be seen as being outdone by Nicola Sturgeon.

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