There’s a warning that the next 12 months could be even worse than the last for the private rental sector in one part of the UK at least.
David Alexander - chief executive officer of DJ Alexander Scotland Ltd, which is part of the Lomond Group - says: “The last year in Scotland has been remarkable for both the sales and lettings market. The boom in sales which began during the first lockdown of the pandemic continued for most of the year and it is only in the autumn when average prices peaked and now appear to be starting to decline.
“For the rental market in Scotland undoubtedly the biggest issue in 2022 was the introduction of the rent freeze in September. This move was opposed by universities, local councils, housing associations, the build-to-rent sector, farming organisations, Scottish Land and Estates, the lettings industry, landlords, and property investors.
“This action dealt a severe blow to the sector which was already struggling with unprecedented demand and limited supply.
“Prior to the introduction of the rent freeze the sector had never experienced demand like this in 40 years and yet this move to limit rents has simply exacerbated what was already an extremely difficult market.”
Alexander says rents have already risen at double digit levels, supply has weakened, and investment in construction of buildings for the private rented sector has been put on hold until some clarity emerges about whether the rent freeze remains in place beyond March next year.
“If the policy continues beyond this date, then this will be a clear indication that the Scottish Government is intent on forcing the private rented sector to solely bear the burden of funding the current housing crisis in Scotland” Alexander claims.
“Rent control has not worked in any country in the world so the idea that Scotland will somehow succeed seems unlikely. The resulting shrinking of the size of the private rented sector coupled with a reduction in funding for social housing will result in even greater shortages for tenants in the future.
“The last year has seen extraordinary demand in the private rented sector which shows no sign of improving in the coming year.
“I believe that this situation will only get worse for tenants in 2023 given the Scottish Governments’ current direction of travel.
“For the homebuying public the last year has been something of a rollercoaster. I think the next year will be calmer and quieter and as long as interest rates don’t go substantially higher then I believe that we will see a slowing of price rises without any serious price fall and a period of greater stability in 2023.”
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Scotland is a special case … very special 😰😰 my concerns are with 2024 ! Labour coming to power, then we really do have big problems.
Very true Simon. I will be out by then. I'm done!
Not just one part of the UK but wide spread, it would be great if we only had to fund the housing Sector, not the Pandemic, the work shy, the Single Parent Families, the Benefit queue and a war.
Don’t forget the invasion from Albania etc.
Everywhere l go, around Britain, the demographics are changing, almost overnight. In an industrial area of Sandwell, l know of a factory that was bankrupted and remained derelict. It was demolished, landscaped, which includes a canalside terrace, and very attractive social housing estate built. I used to work nearby and often pass it, l do not see any indigenous people living there.
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