Agents: Scotland’s Emergency Rent measures are ‘backfiring’

Some 80% of letting agents in Scotland are reporting a dramatic increase in the number of landlords serving notice to sell because of the country’s draconian rent control measures – a sure sign that the policies are failing.

While landlords are unable to evict tenants in many circumstances as the Cost of Living (Tenant Protection) (Scotland) Act is extended, those with tenancies that are naturally coming to an end are now more likely to take the chance to sell.

And in new research, 94% of letting agents have reported an increase in investors choosing to get rid of their properties, rather than provide a home for a new tenant.

LANDLORDS

In December 2022 Propertymark released its first report where seven out of 10 (69%) letting agents saw an increase in the number of landlords serving notice to sell because of the temporary measures. But now in its most recent report released this spring the figure has risen dramatically to eight out of 10 (83%).

Those that aren’t selling are ensuring their future financial position is secure by raising rents in between tenancies. And when asked, 94% of agents said that their landlords are now more inclined to do so as a result of the measures. This is compared to 91% in December 2022.

Propertymark says that rather than solve supply issues in the private rented sector the emergency legislation appears to be alienating landlords. In doing so this is discouraging investment in the sector which, in turn, is inhibiting supply and causing rents to rise faster than they otherwise might have.

EXEMPTION

Of all the notices served to tenants, an average, 67% do not meet the exemption criteria and are awaiting processing from October 2023. This is up from 44% in the last report.

Timothy Douglas, the trade group’s Head of Policy and Campaigns, says: “Rent control is causing problems for the sector in Scotland and we know from our member agents that as a direct result of the Cost of Living legislation rents and costs are now being more heavily scrutinised by landlords with many putting up rents between tenancies to protect against any future cost implications.

“The crux of the housing problem is that demand is far outstripping supply. But this legislation is counterproductive for tenants, pushing landlords out of the sector and leaving little choice for those looking for a rented home.”