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Rent Freeze “end of private rental as we know it” - claim

The Scottish Government’s dramatic immediate introduction of a rent freeze and eviction ban could mark the beginning of the end of the country’s private rental sector.

That’s the reaction from one of many industry figures stunned by the measures announced by Nicola Sturgeon yesterday.

Tom Mundy, chief operating officer at PropTech suoplier Goodlord, says: "This rent freeze represents a potentially seismic new frontier in UK lettings policy. While we understand the need to support tenants, introducing rent control could mark the end of the private rental sector as we know it by stripping away the central incentive which encourages people to invest in buy-to-let properties. 

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“There's a major risk that this freeze will push landlords out of the PRS market at a time when pressure on rental stocks is particularly acute. This will squeeze the whole lettings market and create bigger headaches for the Scottish Government later down the line. Long-term, it could serve to stymie all future investment in the space and fatally undermine the system."

And Simon Tillyer, chief executive at another PropTech firm - Vouch - adds: "This is a huge step from the Scottish Government. It could be the first towards a fundamental re-write of what the UK lettings market looks like. At a time when too many landlords are already leaving the market and there are more tenants than there are homes available to rent, we should not be taking steps that will drive even more landlords away from the PRS. 

“I wouldn't be at all surprised if this is the final straw for landlords and sparks an exodus. This policy risks creating more problems than it solves."

John Blackwood - chief executive of the Scottish Association of Landlords - says:  “Since rumours of this announcement broke, I have been inundated by landlords saying they will be removing their vacant properties from the rental market, and I don’t blame them. Who on earth is going to let a property in the knowledge that they will be unable to meet their own financial and maintenance obligations if their tenants don’t pay the rent or their outgoings increase? Instead of helping tenants pay their bills, the Scottish Government has chosen to penalise people who have provided the homes politicians have failed to provide for decades.”

And David Alexander - chief executive officer of DJ Alexander Scotland Ltd, which is the largest lettings agency in Scotland and part of the Lomond Group - is outraged at the news. 

“The proposed announcement by the First Minister of a rent freeze for tenants in the private rented sector tells you all you need to know about the Scottish Governments’ commitment to consultation and fairness. With the burden of the cost of the freeze being placed upon landlords the First Minister seeks to gain cheap political points whilst not addressing the fundamental failings of her own governments’ housing policy.

“No government would tell supermarkets, pubs, or clothing manufacturers to freeze the cost of their goods, but it seems that Nicola Sturgeon and her colleagues believe the private rented sector is fair game. One parliamentary source is quoted in the media as saying if the cost of a freeze was met by landlords the policy would cost the government nothing.”

He continues: “The result of this policy will be a shrinking of the private rented sector at a time when demand is at its highest. This has come at a time when local councils are seeking help from the private rented sector in housing the homeless as they have no capacity within social housing.”

“This policy underlines how inadequate the response of the Scottish government has been to delivering homes for the people of Scotland. There are currently 132,000 people on the social housing waiting list. There are only 1,000 more social housing homes available now compared with when the SNP came to power. Between 1979-1990 there were 63,795 new social housing dwellings completed. 

“In the 12-year period from 2009-2020 there were 56,823 new social housing dwellings completed. This means that 12.3 per cent more houses (6,972) were built for the social sector in Scotland by the Thatcher government compared to the current SNP administration.”

Sturgeon says the emergency rent freeze and eviction ban will last until "at least" March 31 next year.

Although the rent freeze measure will require additional legislation, it will operate retrospectively so effectively means an immediate ban on rent rises.

Sturgeon comments: "By definition, these are temporary measures, but they will provide much-needed security for many during what will be a difficult winter. We envisage that both measures will remain in place until at least the end of March 2023."

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

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    The lunatics are now in charge of the asylum.

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    The lunatics have been in charge for some time now, In my 80 years I have never seen the country in such a mess save during the second world war.

     
  • Suzy OShea

    If rents include utilities, then the first thing landlords need to do is to install electricity and gas metres in their properties. This is daylight robbery by the SNP!

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    Wht wouldn't they already have meters?

     
  • Peter  Roberts

    OMG.
    Do these dumb fools not realise that the Landlords will simply sell up, and it mostly won’t be to other LLs.
    Talk about, How to put thousands of people out of there homes. These fools can’t see past the end of there noses.

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    Time to sell.

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    The headline is wrong. It should read “rent freeze - end of private rental sector”

    So much for consultation and fairness! Retrospective legislation is moving the goal posts, interference in private contracts, it’s unjust. Another temporary measure that will become permanent.

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    Absurd, how to create a housing crisis in one simple step

  • Jason Flicker

    The usual LL twaddle. "I'll sell up" "it's the end of the PRS" no you won't "sell up". And it won't be the end of the PRS. If anything, this is just the beginning lol.

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    Keep taking the meds 😂👍🏻

     
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    You’ve misspelt your surname

     
    Peter  Roberts

    LLs are already selling up.
    The interference by Governments and Councils are seeing to that.
    I will NEVER rent another of my properties again and as tenants are moving out they are being sold.
    PRS is totally on its way out.
    Just take a look at the figures.
    I hope the Councils have good contracts with B&Bs and cheaper hotels as that is where they will end up having to place people and families if they don’t want masses of people on the streets.
    They cannot keep up with the social housing requirements as they don’t build anywhere near enough for the demand.

     
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    Landlords before this were already selling up, this will encourage those who delayed or were sitting on the fence to get out ASAP

    Don't take my word for it, in an article on Landlord today on 8th Aug 2022 it reported the treasury has had a massive increase in capital gains tax due to landlords selling (sorry it wont allow me to link the article)

    This is a very bad day for tenants, this will mean less properties available in the future and higher rents as a result.

    Well done Scotgov, you have excelled in showing the world how incompetent you really are

     
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    Jason you are either trolling or delusional. Landlords are already selling up, this will now accelerate unless the government back tracks and does something positive for Landlords. I have sold two properties in the past two years and one more is on the market. So far I have sold when tenancies end, but sadly this will probably change when I sell the remaining three. It may not be the total end to the PRS, but it will be very contracted and what is left will cost an arm and a leg to rent due to excess demand.

     
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    Doh

     
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    Doh

     
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    I've already sold 4 all to private buyers and the rest are going too. Don't presume you can forecast my actions.

     
    George Dawes

    Like YouTube for some bizarre reason this site doesn’t have a dislike button

    Jason’s idiotic post is most definitely worthy of that

     
    Peter  Yednell

    I've already started "selling up".. I am waiting until my current remaining tenants voluntarily leave..Like most landlords I am reluctant to evict anyone /not renew contracts..

     
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    Jason, who are you ? Total nonsense what you have written.

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    😂 Will the last landlord in Scotland 🏴󠁧󠁢󠁳󠁣󠁴󠁿 please turn off the lights 🏡🏡. I can’t see Liz being this unhinged…. I hope 😬

    Peter  Yednell

    I think your wrong.. The Tories in the last "Queens Speech" are proposing ending fixed term contracts (ASTs) .That means rent controls as any LL could just double or treble rent to get rid of bad tenants...

     
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    I hope so too Simon, but who knows ?

     
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    It lasts till March 2023 then it’s the big sell off. Sturgeon has accelerated homelessness for Scots in one move

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    I believe it’s being introduced as a “temporary measure” to make it more “palatable”. The mandatory grounds for eviction were a “temporary, emergency”measure which have become permanent. The previous winter eviction ban will probably become a permanent rule after this winter.

     
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    Temporary like evictions in covid - which just got extended! Easy to make it permanent once it's in.

     
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    Only 134000 on the waiting lists that’s a surprise have the others not heard of the freebie’s.

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    Give it a week and wait for the U turn when there are no properties available on the rental market.

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    I would hate to see the United Kingdom break up but I feel it's inevitable. This SNP are crazy nutcases and the Scottish people love them like a cult and keep voting for them. The finances of Scotland are a total mess subsidized heavily by London, yet this Scottish government keep getting away with total mismanagement. This latest crackpot scheme will not solve the housing crisis.

    I feel sorry for Scottish landlords. I would advise them to leave that country asap.

    I would never keep investments in Scotland with the threat of an independent Scotland lurking and led by the SNP. The SNP are a disasterous more socialist version of Labour. I really don't like that so much English investment is kept in Scotland, the pension companies as an example. The preparations should be made now - move to the other side of the border asap. People will not want their money kept in Scotland. In the event of independence, the UK would probably not allow them to use the pound and they'd be a financial mess.

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    Numerate literate Scots HATE the SNP.

    Problem is many of us now live, work and vote elsewhere leaving a rump of benefit claimants to vote SNP without understanding the consequences.

     
    John  Adams

    Yes sadly the SNP are fundamentally a racist party, they blame all the country's problems on the English, we stole their oil, we stole their land etc it's an argument that doesn't float economically but it does to those who don't understand who economic policy works. The SNP can't explain where the money is going to come from, Oil is increasingly under pressure to be replaced by Green energy so then what? Are Whisky exports going to support 5million people? Are the EU going to want a net beneficiary as a member? The SNP have no credible answers. I see much trouble ahead for Scotland, as for Labour cheering from the sidelines an English only parliament is significantly more likely to remain Conservative due to the electoral structure currently offset by the Scottish votes.

     
    Matthew Payne

    The SNP have got their strategy all wrong. If they want independence, they should hold their referendum in England. Slamdunk if ever there was one, there aren’t many (any) people who wouldn’t mind seeing the back of funding the Barnett formula, especially when they then get constant abuse from the administration that benefits from it.

    Part of the reason Nicola Sturgeon is angrier than she has ever been now and is making these reckless decisions is that she realises Putin ended her political career when he invaded Ukraine. Indyref 2 is her last chance saloon. If it doesn’t happen, she is finished. If it does happen, she is finished. The cost-of-living crisis has made sure that only those Scots who watch Braveheart every night would be the only ones remaining who would vote for Scotland’s economic collapse, aka Independence, the middle third straddling the 50% finish line, even those partial to a bit of blue face paint, will think twice and play safe.

     
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    When a country appropriates private property, which is what this is, then that is communism.

  • George Dawes

    I suggest we rebuild hadrians wall , 50 feet high and electrified

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    George you are delusional, electrified fences rubbish! Have you seen the cost of electricity lately??? Try steel spikes it will be cheaper.

     
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    This of course is not the first time these tactics have been used to impoverish and bankrupt a minority
    before he moved on to a more lethal phase Adolf Hitler used economic terrorism against Jewish families
    So now the world can see from where those in power gain their inspiration.
    If I was a Scottish landlord I would be very afraid ,what comes next ?

  • George Dawes

    100 years ago , history repeats itself …

    Agenda 2030 , that loony klaus and the wef …

  • John  Adams

    The argument is that you are helping tenants well in short term yes, but with rising interest rates expect more properties to go up for sale as the property increasingly makes no economic sense. The lunatics expect this to decrease prices but with an existing shortage you are just swapping occupation so prices won't fall, instead those that need to rent are going to end up being put in council hostels, as the rental market dries up. Expecting big corporations to take over is equally naive as the returns on investment will be lower and the grief of trying to deal with anti social behaviour will rise for the other residents.

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    We all know this rent freeze will be extended because the Scottish government are doing nothing that will improve the economy by March, so if they judge it’s needed now, they will judge it’s needed for the entire time they are in office.

    They also will never accept the reduction of rental properties is because of their policies, so they won’t reverse this or do any of the measures needed to bring more landlords into the market.

    It’s not the end of PRS, but it is a significant catalyst for the gradual decline that has been happening over the last few years with all the consistent increases in costs, regulations, licensing schemes and taxes that have been introduced over the last few years.

    Some landlords will sell up, some will retire early, some will move appropriate properties into short lets. Some investors that would have gone into BTL will look elsewhere. Landlords have always exited the market for whatever reasons, and have always been replaced by others coming in, but I think the balance will shift and those exiting will increase, and numbers entering will decrease.

    End result will be a significant shortage of available rental properties for an ever increasing number of people needing to rent. The rentals may be affordable, but the properties will not be available. Sturgeon has taken a very short term approach to this, looking for quick, easy and cheap brownie points which will ultimately have a long term cost that will far exceed the short term gain.

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    Well said. We used to have 4 properties in Scotland but sold them all when the equivalent of S21 went. We are now selling off the English part of our portfolio with 1 sold, 2 on the market and the rest as become vacant. As legislation keeps changing, I don't see how any long term business decisions can possibly be made. You can't run a business in this hostile climate...oh, but of course, LLs don't run businesses, we are investors!

     
  • Mark Wilson

    What we are seeing are the unintended consequences post the creation of the AST and the creation of buy to let mortgages.

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    What you are about to see is living standards for thousands about to hit a new low as LL's sell up in Scotland to owner occupiers & reinvest in other asset classes. Tenants have been manipulated. You can celebrate this news if thats your true character

     
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    Mark, What you are seeing is the consequences of removing Section 21.
    Before AST there was no Renting or Lettings business.
    Buy 2 let Mortgage’s came much later and from memory it was the Woolwich Building Society were first to offer this service on a wide scale.
    Prior to Buy 2 Let I always used Commercial loans.
    The Consequences is further exacerbated by the Stupid Outrageous so called THE WHITE PAPER.

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    Spot on Michael!

     
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    Really the Private rental sector is a massive success. So the ultra rich have decided to appropriate it.

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    Crazy how landlords act like they’re providing a vital public service and should be thanked but are all looking to sell the second they can’t gouge their tenants anymore. Leeching scum, get a job!

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    Look at the statistics.

    Over 85% of tenants are happy with their landlords. Most landlords DON'T increase rents for existing tenants, unless they need to recoup costs for damage or negligence etc. Most landlords of working age DO have jobs and even those of us over normal retirement age continue to work in our properties.
    I would also say that the contribution we make is VITAL in providing much needed homes which the social sector couldn't provide.

    Save your venom for the tiny minority of rogue tenants and landlords who cause misery for others and GET YOUR FACTS RIGHT!

     
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    Do you work Susan ? what do you do ?

     
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    So Councils are leeching scum too for having the effrontery to provide housing? No? Ah, so it’s about private individuals, it’s ok for the state to gouge the tenants…..

     
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    Susan, if making money is so easy for landlords, why aren't you one?

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    Don't respond to the alleged Susan you have to feel sorry for the sort of poor creatures who are so full of bigotry and hatred they choke on their own venom ,pity them so much has changed they can no longer vent their spleen on people of colour or people of a different gender identity they have to have a minority to hate it is their reason for living , landlords and their children are just a convenient substitute
    So perhaps we should show them a little understanding it must be hard to be so full of hate and prejudice
    But of course don't let them near your kids

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    Susan, calm down if that’s all it takes to be clever is to knock people who dedicated their lives to providing first class housing to millions at a reasonable cost while paying taxes to keep as many more. I know if we were as clever as you we wouldn’t do any of this, sit on the sidelines and complain.
    Bloodsucking you’d need a good leach to suck the poison out of your blood.

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    Nobody is forcing anyone to rent from a private landlord, it is a choice. There are alternatives. Ask the council, friends and family, B&B, caravan or even buy a property. If you don't like the rent asked, look elsewhere. If you find there is a shortage of properties to rent focus your attention at the government to encourage private investment to provide more choice.

  • Peter  Yednell

    The only real shortage housing situation is in the South East and is due to London's economic sucess and (correct) green belt policies.

    The government needs to do more to encourage growth up north. Lower personal and corporate income taxes outside the South East would help along with investment in Infrastructure including housing. Landlords in the South East are lucky to make a 4% pre tax return. Blaming landlords for a housing shortage and high rents is stupid. The government has the power to build loads of council homes or tax subsidise loads of private house building. Forcing private landlords on a pre tax return of 4% out of the market does nothing to help.

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