An unexpected loser in the Scottish rental laws overhaul could be the Edinburgh Festival where the new controls over private sector rents could price many visitors out of staying in Edinburgh during the festivals, letting agents have claimed.
David Alexander, managing director of DJ Alexander, leading Scottish property agents, has said he fears fewer flats would be available for short-term rent under radical proposals drawn up by the Scottish Government.
There are also concerns that Edinburgh landlords will be forced to abandon the lucrative festivals market if they are banned from repossessing their properties from tenants unless they intend to sell or live in them.
This, David Alexander added, could in turn push rent prices up as other landlords in a position to do so would look to cash in on the lack of accommodation.
Mr Alexander told The Scotsman newspaper:
“In Edinburgh, many landlords who let out flats to student tenants for nine months then take a summer break, during which the property is let to Festival-goers for a month.
“However, under the proposals being considered by the government, the tenant could simply turn around and say, ‘I have security of tenure, I like it here and I’m not moving’ and the landlord could do nothing about it.”
As well as pushing up accommodation costs for the festival’s millions of visitors, the agent argues that the new rules would reduce the variety of accommodation available.
“For many visitors, staying in a rented flat, rather than a hotel, is part of what the festival is all about,” he says. “There are even festival-lovers from Glasgow, living just 45 miles away, who lease flats in Edinburgh for the entire month.”
Alexander also believes restrictions on repossessions would have a wider negative effect across the city’s conventional rental market.
“For some landlords who let out on a long-term basis for most of the year, the additional income that comes from a month’s festival let is what makes the investment profitable. If legislation makes this opportunity more difficult then they may just take the decision to sell up – leaving less properties available to rent for the working residents of Edinburgh,”
The SNP have been looking at changes to the Scottish rental laws for some time, with the aim of giving tenants more security of tenure (landlords cannot re-take possession) and to control the amount landlords can increase rents.
Launched by the housing minister Margaret Burgess last October, a government paper, “New Tenancy for the Private Sector”, the second consultation of which ended last month, its main proposals look on track to be passed into law by the Scottish Parliament in the near future.
Under the tenancy change proposals, any required “notice to quit” period will be linked to how long the tenant has lived in the property. The “no fault” clause (equivalent to the England & Wales Section 21 process), which allows landlords a mandatory right to reclaim their property back, without giving any reason why they want possession, once the fixed rental term has ended, would be scrapped.
Housing charities and campaigners such as Shelter Scotland have disputed the letting agents’ claims and insist the biggest overhaul of the Scottish tenancy legislation in 25 years would benefit tenants and landlords alike.
Adam Lang, head of communications and policy at Shelter Scotland, has said:
“That any letting agent should raise concerns about not being able to remove people from their homes so they can turn a high profit during the Edinburgh Festival season, shows exactly why reform of the private rented sector is badly needed.
“Despite the growing number of people – particularly families with children – now living in the private rented sector, it is all too often viewed as short-term housing and not the long-term homes Scotland desperately needs.
“The new tenancy proposals are aimed at rebalancing the relationship between tenant and landlord by improving the security of tenure for private renters while safeguarding the rights of lenders, investors and landlords.
“These proposals will help to make the sector fit for purpose and fair for all.”
Alyson Macdonald, of the Living Rent Campaign, has said that the market value of a rented flat in Edinburgh was hugely inflated during August because Festival visitors will pay four or five times as much as tenants who live in the city year round: “Rented properties are already very lucrative investments for landlords [that] don’t need the extra bonus of sky-high Festival rents to make ends meet.
“We would suggest landlords concerned student tenants won’t move out over the summer try offering to compensate them for the inconvenience and finding storage for belongings.”
John Blackwood, chief executive of the Scottish Association of Landlords, has added to these arguments by saying:
“We would urge the Scottish Government to reconsider additional protections for tenants without harming investment in the private rented sector.”