Organisations representing private landlords and investors today appeared before the Scottish Parliament to continue to urge the Infrastructure and Capital Investment committee to work with the private rented sector to create the policies that will protect both tenants and landlords as well as urging reconsideration of parts of the Private Housing (Tenancies) Bill.
Speaking at the Committee, representatives from PRS 4 Scotland, Scottish Land & Estates, Scottish Association of Landlords amongst others raised concerns that the Private Housing (Tenancies) (Scotland) Bill in its current form sets a number of very significant alarm bells ringing in the private rented sector that need to be addressed.
Building their case around four key issues, the PRS sector organisations highlighted:
- The deficiencies of the proposals, which do not offer enough flexibility for the likes of students, many of whom only want 9-10 month leases, or tenants looking for accommodation during key periods such as Edinburgh’s summer festival season.
- Rent controls, which give powers to local authorities in rent pressured areas to intervene, causing long term uncertainty and deters investment in housing stock
- Shortage of market data and lack of a standardised, robust methodology for monitoring actual rents at the local level which hampers the capacity of government, local authorities and investors to make authoritative decisions.
- The deficiency of the grounds to cover all reasonable circumstances, for example the repossession of a property to provide accommodation to an employee.
Speaking after the meeting, John Boyle for PRS 4 Scotland said:
“Recent rental trends demonstrate that Scotland has a severe lack of housing supply, not that rents are out of control. When demand is high and supply limited, rents go up. With the Private Housing (Tenancies) Scotland Bill we are now faced with a direction of travel which could dis-incentivise investment and a series of unintended consequences that will weaken the sector for many years to come.”
“Recent research estimates that Build to Rent could attract more than £30bn of new investment in the United Kingdom over the next five years with full policy support. This would deliver more than 150,000 homes and create a platform for thousands more to be financed and built. If Scotland can create the right conditions for investment, then we can expect to attract a rightful share of this investment. Unfortunately there are growing signs that the attention of major funding players is being directed toward more favourable regulatory environments elsewhere in the UK.”
Also raised at the meeting were concerns about how proposed changes to tenancy agreements as proposed in the bill would have negative consequences for the student housing market in Scotland.
LetScotland Chairman Malcolm Warrack said:
“The Scottish Government’s proposals in the Bill to effectively end tenancies of between 6-12 months is particularly worrying, especially for students, who often either wish to rent a property during the academic year or for a full 12 months - the result is that tenants now look likely to be locked into longer term tenancies that they may not want.”
“Many Landlords, like tenants, value the flexibility of shorter tenancy agreements; the changes proposed by the Scottish Government are another leap into the dark that could have devastating consequences for the private rented sector in Scotland. In addition, there will be a knock-on negative effect on short stay lets, leading to adverse consequences for tenants looking for accommodation during key periods like Edinburgh’s summer festival season and during major sporting events.”
“It is clear that the intention of the Bill was not to hammer students and Edinburgh’s festivals as well as investors in student accommodation, but that is what is likely to happen. and I hope the committee evidence will convince MSPs to consider the consequences of these proposed changes.”
Further concerns were raised about the tenancy agreement by Katy Dickson, Policy Officer for Scottish Land & Estates:
“Scottish Land & Estates are supportive of the principles of introducing a new tenancy but continue to have concerns that the grounds for repossession are not robust enough to reassure landlords.”
“Without the ability to end a tenancy at the end of its contractual period landlords must be able to rely on watertight grounds that cover every eventuality where it would be reasonable to ask a tenant to leave. The proposed grounds currently fall short. We seek an additional ground allowing repossession in order to provide accommodation to a new employee. Without this ground rural businesses will struggle to develop and grow. As prescribed grounds can never cover all reasonable circumstances we also call for a final ground which enables a landlord to make a case to the first tier tribunal for any other reasonable circumstance which is not covered by the prescribed grounds. This would provide the safety net which would give landlords the confidence to let but be at the discretion of the tribunal which offers protection to tenants.”
“This is a genuine opportunity to improve the sector for both landlords and tenants and that must not be missed. “