The recent decision to abolish The Fair Rents (Scotland) Bill demonstrates the difficulty of introducing lettings regulation amid ongoing uncertainty, while highlighting the advantages of industry-led codes of practice over top-down regulation, according to PayProp.
The bill, designed to protect private renters in Scotland by introducing a rent cap, was terminated by the Local Government Committee at a private hearing on June 26 with no public statement given about the decision.
Some campaigners claim the committee appears to have acted against the instructions of Parliament, as politicians were not given an opportunity to debate
Put forward by Scottish Labour MSP Pauline McNeill, the bill, dubbed the Mary Barbour Bill, to regulate rents in the private sector by capping rent increases for private residential tenancies at no more than the annual Consumer Prices Index plus 1%.
Private tenants would also have been given the right to apply for a ‘fair rent’ to be based on the condition and amenities of the property, determined by a rent officer or First-tier Tribunal no more than once in any 12-month period.
Additionally, landlords would have been required to disclose the rents they charge for each property when they registered or renewed their registration on the Scottish Landlord Register.
But Neil Cobbold, chief sales officer at PayProp, is not surprised to see the bill scrapped.
He said: “Rent controls are complex to introduce and deeply controversial among landlords and property professionals. Therefore, now may not be the best time to consider such far-reaching regulation as the market continues to recover from the unprecedented shock of the last few months.”
There was concern among some buy-to-let landlords in England and Wales that had The Fair Rents (Scotland) Bill been introduced it could have been later adopted south of the border.
But Cobbold believes that delays to new Scottish legislation could also be mirrored in England as the market continues to recover from the coronavirus pandemic – but that industry self-regulation may fill the gap.
He added: “Before any additional top-down regulation is introduced across any part of the UK, there would need to be significant research and analysis carried out, as well as a full consultation with all PRS stakeholders.
“The difficulty of bringing forward new property industry legislation makes the role of industry self-regulation that much more important.
“In contrast, initiatives like the ongoing Code of Practice Steering Group consultation, based on the recommendations of the RoPA report, give property professionals a chance to agree new industry rules that are sensitive to challenging market conditions.”
Cobbold says that while Covid-19 could affect the plans for many pieces of legislation, property professionals should take the opportunity to make their voices heard.
He continued: “The consultation period will remain open until 4 September, and I would encourage everyone involved in the property industry to give their feedback.
“With so many from the sector already getting involved, we can reasonably expect the final document to reflect our needs and concerns while ensuring that we continue to do our best for landlords, tenants and homebuyers.”
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