A leading landlord and lettings agent in Scotland has said that the country’s plans to introduce rent controls are misguided and that no one has thought through the likely complications of their introduction.
Jim Parker, who runs multi-branch lettings agency Fife Properties, has made the comments after he shared a platform with recently-appointed Scottish housing minister Patrick Harvie at an industry gathering organised by MyDeposits earlier this week.
At that meeting Harvie revealed that the government’s controversial plans for the PRS would be revealed before the festive break.
These include considering a permanent annual winter evictions ban following consultations, reining-in Airbnb, possibly extending the six-month eviction notice permanent and, more controversially, introducing local controls that would see rent rises above inflation restricted within ‘pressure zones’.
Referring to these, Parkers says: “I think there are a lot more complications to rent controls than they realise and I’m not sure the minister understands the full ramifications of what he is proposing if the government gets this wrong – it could be catastrophic”.
Parker, who is a senior figure within the country’s property industry, says he is particularly worried that managing the complicated relationship between the housing element of Universal Credit, the housing allowances/payments cap bureaucracy and rent controls would be very difficult.
He also points that the rent pressure zones that underpin the proposed rent controls, established by law in 2016, have yet to be taken up by any councils because it is difficult and time-consuming to gather the evidence to justify a local implementation.
“I think this is why they are planning to bring it in as mandatory via legislation – otherwise it will not be taken up willingly,” he adds.
A Scottish government says its Shared Policy Programme will see it introduce an effective system of national rent controls, with ‘appropriate local mechanisms to allow local authorities to introduce local measures. No decisions on what this model will look like have been taken and we are carefully considering a wide range of evidence and views on this matter’.
But Parker also disagrees with Harvie that affordability is a problem in Scotland.
“If you look at how much of tenants’ pay is eaten up by their rent then it’s a lot less than during the 1980s and 1990s – so I don’t understand why they’re proposing that rent should never be more than 25% of a person’s pay within these zones – it’s very rare for someone to pay less than that out of their wages anywhere in the UK.”