We do it Differently Here! Why the Devolved PRS is Not the Same Throughout the UK

You’d think that landlords across the UK all have to deal with the same regulatory legislation. You’d think… but you’d be wrong.

The conditions under which landlords operate and tenants rent are not homogenous within the United Kingdom. 

The devolution of powers to Scotland, Wales and Northern Ireland means they have all adopted their own approach to the private rented sector (PRS).

Portolio are primarily concerned with the property market in Scotland, but we keep a weather eye on what is happening elsewhere in the UK as changes and trends can feed into individual legislatures.

The UK Parliament published a report entitled ‘Comparing private rented sector policies in England, Scotland, Wales and Northern Ireland’ which makes very  interesting reading, focusing as it does on all the main areas of policy difference between the administrations.

As an experienced property investment professional, I’m going to guide you through the major differences between the devolved PRS, and what conclusions, if any, we can draw from them.

Scotland, Wales and all points west

Shelter published an article highlighting the major differences between the various nations’ approach to the private rented sector earlier in 2022.

In their view, the devolved PRS in Scotland and Wales are well ahead of England in terms of protecting tenants rights. Scotland banned ‘no fault’ evictions in 2017, while Wales has taken a more measured approach.

In Wales, tenants are guaranteed a minimum of a 12 month let, with a six month period to find alternative accommodation in the event of a ‘no fault’ eviction notice.

The changes to tenant rights in Wales are encompassed in The Renting Homes Act 2016, which came into force on this month.. Amongst other changes it will ban ‘retaliatory’ evictions following a request for work to be done to a property.

It also imposes additional responsibilities on landlords, including ensuring that a home is fit for human habitation (FFHH).

Scotland, Wales and Northern Ireland have introduced compulsory registration of landlords to end the discrepancy between the information available about them and tenants. Shelter feels that while important, these steps don’t yet go far enough.

The mechanisms of the schemes vary as do the requirements and potential sanctions, but common to all of the schemes is the ability to search a public register of landlords.

None of these protections yet apply in England, where there is only a register for landlords with houses of multiple occupancy (HMO). Otherwise a more laissez faire approach still holds sway.

Regulation of landlords

I doubt that it will come as a great surprise that much of this legislative activity in the devolved administrations concerns itself with improving conditions for tenants and adding further responsibilities onto landlords.

This was most recently typified by the decision of the Scottish Government to introduce a rent freeze until March 2023, although they have reserved the right to extend it further should they see fit.

Shelter Scotland published a very succinct article outlining what the Scottish Government’s decision means for tenants and landlords. It covers both the rent freeze itself and the restrictions on evictions which run concurrently with it.

Writing in Landlord Vision, George Dibb outlined the ‘scathing’ response from Scottish landlords, housing associations and their representatives.

The main arguments against the change centre around the lack of consultation and the fear, as one contributor says, that under the Scottish Government, temporary measures have a habit of becoming permanent.

The failure of the Minister in charge of the policy to adequately explain how it would be implemented has also caused a certain amount of anger. Landlords are asking how they are meant to cope when facing the same rising costs as their tenants.

At present there have been no similar moves to control rents in Wales or Northern Ireland, so Scottish landlords may well feel that they’ve been chosen for special treatment as far as the PRS in the UK is concerned!

Effects of different regulation

The devolved PRS divides opinions within the market. Some feel that  Scotland and Wales are setting trends in terms of better regulation of the private rented sector.

Others feel that, while this is true from a tenant’s perspective; landlords are seeing an increasing burden of legislation.

With the Scottish rent freeze only taking effect from October 2022, there hasn’t been sufficient time to gather accurate data on how these actions are affecting the private rented sector.

In early 2022  there was a flurry of stories claiming that landlords in Wales were quitting the market. This piece in Landlord Today is typical of the reports at the time.

Increasing red tape was blamed for this apparent exodus, although the changes being introduced were not as far reaching as those we’ve seen in Scotland.

Similarly, after the rent freeze was announced in Scotland, landlords were either quitting the market in their droves, or converting to holiday lets, as this piece from Property118 suggests.

It will take some time to gather and analyse data about changes within the PRS. Without accurate information, we simply don’t know how much truth there is to these stories.

The immediate future

At present, there are no major pieces of legislation scheduled in either Scotland or Wales which would affect the PRS, but we wait to see if the Scottish rent and eviction freeze will end on the 31st of March next year.

Lacking a fully functioning Assembly at present, it’s unlikely that there will be any major changes in Northern Ireland in the near future.

England is still in the very early stages of addressing the PRS landscape, with House of Commons reports commissioned and delivered but no signs of immediate action to change the rented sector there.

Advice from the property professionals

As 2022 grinds to its end, it’s fair to say that it has been a difficult and unpredictable time for the property market in general. Rising inflation, soaring living costs, increasing interest rates and a lack of available properties have been challenging.

If you read the plentiful commentary on the private rented sector you may get a skewed view. Yes, there are problems but one of those is a lack of housing stock which is a systemic problem across the UK.

The reality of the devolved PRS is that even within the UK, you need country specific advice if you’re considering becoming a landlord. What flies in England could land you in trouble in Scotland.

The market is still healthy, homes for rent are in high demand. The economic climate has changed markedly, but you can still make a worthwhile investment, you just need to do your homework before dipping a toe in the market.

In summary…

As a property professional, I live with the PRS day in and day out, and it’s not about to start pushing up daisies anytime soon, despite some of the doom and gloom reported.

If you have been considering investing in the buy-to-let market, but are unsure whether this is the right choice for you, we would be more than happy to chat through your options and advise of the pitfalls to avoid.

With years of experience in the Scottish PRS we’ll help you stay firmly on the right side of the rules and regulations north of the border!

Written by Ross MacDonald, Director of Sales & Cofounder of Portolio

Get in touch on 07388 361 564 or email to [email protected]