Scottish landlords say the country’s new 'rent arbitration scheme' which for most people is rent controls by the back door, will only exacerbate existing problems and worsen access to housing.
The Scottish government has proposed to temporarily change the rent adjudication process for one year when the current Cost of Living rent cap measures end on 31st March. Landlords will then be able to return their rent prices to the open market value, allowing tenants to apply to Rent Service Scotland or to the first tier tribunal if they feel the increase is unwarranted.
If the gap between the rent paid and its value on the open market is more than 6%, the price will be allowed to increase by 0.33% for every percentage point it is above that level, capped at a total of 12%.
John Blackwood, chief executive of the Scottish Association of Landlords, says that as tenants have also pointed out, the tapering structure is too complicated. “It would have been far better to allow landlords to increase rents and if tenants felt it was excessive to encourage them to apply to the Rent Office for a rent adjudication,” he tells LandlordZONE.
The main focus should be on increasing investment in social housing, explains Blackwood. “Rising rents are a symptom of the failure to build enough affordable housing in Scotland. Rent controls have only caused rents to increase in Scotland higher than the rest of the UK.”
Tenants’ Rights Minister Patrick Harvie (pictured) says his plan will enable landlords to react to an increase in costs and reinvest in the PRS.
A policy document adds: “The Scottish Government recognised the potential for some unintended consequences when the rent cap ends...Any changes made to the adjudication process would be intended to smooth the transition out of the rent cap and protect tenants from steep rent increases which could be experienced if there is a sudden move to open market rent from rent levels that have been suppressed.”
The Cost of Living Act and its rent controls have been attracting criticism for months now. Last year letting agency trade group Propertymark said greater numbers of landlords were being prompted to quit the sector in Scotland or increase rents between tenancies to cover future costs.
Giving evidence to the Scottish Parliament's Local Government, Housing and Planning Committee on the temporary legislation, it explained that the majority of letting agent members continued to see landlords exit the market.