March 9, 2022
It’s a time of change in Scottish housing right now.
If you’re a landlord in Scotland, you’ve probably heard about the new Scottish tenancy laws being proposed by the Scottish Government.
You also may have heard about proposals for Coronavirus measures being extended or made permanent (if not, don’t worry, we’ll address that in this blog).
All in all, there is plenty of food for thought and we’re going to explore the possible implications of these new Scottish tenancy laws for the Private Rented Sector, and how they might apply to you as a landlord.
With recent evidence from Zoopla(below) showing that increasing numbers of landlords are responding to the change in regulations by selling up, we hope that those in power take note and act accordingly.
Currently, a consultation is going through the Scottish Government. We thought this would be a good time to highlight it, because this is your chance to have your say and there are some significant issues being discussed.
So, without further ado…
A new deal for tenants – new Scottish tenancy laws explained
There are several proposals in the Scottish Government’s consultation paper. They form part of the Housing to 2040 strategy as part of an ambitious and wide-ranging plan to overhaul Scotland’s housing situation.
This strategy, as proposed by the Scottish Government, will have a significant impact on all stakeholders in the private rented sector.
What is being proposed?
Tenants’ rights minister Patrick Harvie is seeking to introduce ‘new and improved’ measures to improve tenants’ rights; including rent controls, stronger penalties for illegal evictions and a Housing Regulator.
It is also expected that minimum standards in energy efficiency will be set, aimed at helping Scotland to achieve climate change targets and making homes cheaper to heat.
Ultimately, the aim is to bring private rented sector tenants in line with social housing tenants in terms of their rights and the responsibilities of PRS landlords to adhere to the same standards as their social housing counterparts.
You can read more about the proposals outlined in the consultation in this article from Scottish Housing News.
How have the plans been received?
Daryl MacIntosh, Policy Manager at Propertymark, sounded a reasonable note of caution on the new Scottish tenancy laws with this statement:
“Whilst we support the right to an adequate home and the Scottish Government’s commitment to elevate standards and quality in the private rented sector, we fear the policies outlined in the Draft Rented Sector Strategy will have unintended consequences and ultimately be detrimental to tenants unless there is a balance with landlords’ rights.
“We have real concerns that the proposed system of rent controls will undermine the viability of the private rented sector and do nothing to tackle the perceived affordability issues, while further regulatory burdens will inevitably continue to force landlords to exit the market.
“If the Scottish Government wants to ensure a healthy supply of good quality, affordable and secure homes, it must recognise the value and significance of the private rented sector and actively encourage more investors to provide homes. Only by increasing and sustaining investment in the sector can it achieve its aims, and the Strategy as drafted falls far short of providing the certainties and incentives that are needed.”
John Blackwood, chief executive of the Scottish Association of Landlords, also praised the new measures but emphasised the need for a greater balance with landlord’s rights:
“Landlords and letting agents in Scotland have for a number of years been calling for certainty and strategic direction for the Scottish private rented sector. We welcome any move towards that.
There has been a dramatic reduction in supply of private rented accommodation so we must hope this process will acknowledge the crucial role of landlords in providing safe, quality homes and encourage them to remain in the sector helping to prevent the shortages which have seen individuals, students and families alike unable to find a suitable home.”
The Coronavirus (Recovery and Reform)(Scotland) bill
This Bill isn’t part of the consultation named above, in fact it’s already gone through a 12-week consultation and is now at the Bill stage, but we thought it would be useful for you to know about as there is a specific focus on the private rented sector.
The bill proposes retaining some of the temporary measures introduced during the Covid-19 crisis, among them the retention of pre-eviction protocols and encouraging landlords to make sure that their tenants have access to correct information.
Although a welcome return to pre-pandemic notice periods of three months for a Private Residential Tenancy and two months for an Short Assured Tenancy were announced in late February 2022, there is still concern from key voices in the PRS,
Among them is Daryl McIntosh, policy manager at Propertymark. He said:
“The permanent adoption of discretionary grounds for possession is disappointing. While the move was to an extent acceptable as a temporary response to the COVID-19 pandemic, the Scottish Government has provided no justification or evidence of the need to implement discretionary grounds on a perpetual basis.
The long-term consequences of this change can only be entirely detrimental to the private rented sector, with a further decrease in supply of property and increasing rents becoming a very real threat”
What do you think? We’re inclined to agree that structures need to be put in place to ensure that landlords are adequately supported in carrying out their increased responsibilities.
Advice from the property pros
We all, without exception, welcome any moves which will increase the security of tenants and acknowledge the importance of offering comprehensive tenant protections.
However, it is only right and fair – and we think you’ll agree – that we ask for similar protections for landlords themselves, particularly when extra responsibility is placed on them to ensure correct procedures are followed.
The Scottish buy-to-let housing market is buoyant and exciting as ever right now, and in this time of reduced housing stock coupled with greater need for affordable housing, we need landlords more than ever.
Across the country there are landlords providing safe, comfortable homes and the value of that should not be underestimated. As I see it, they are ordinary people who are making a positive difference and should be supported as much as possible.
So, we urge you to read through the links and the consultation paper itself. It’s your chance to really have an important say in shaping the Scottish Government’s policies regarding the private rented sector.
Psst! The closing date for the consultation is April 15, 2022, so if you want to have your say on new Scottish tenancy laws, don’t miss out!
In summary…
We do understand that there’s quite a lot to take in when it comes to new Scottish tenancy laws, so we hope we’ve helped you make sense of it, and highlighted some important points about the consultation in the process.
At the end of the day, it’s all about making an informed choice and finding out what works for you, but that can be difficult to figure out when faced with a mountain of facts and information.
So, if you’re needing a little help sifting through it all, or have any questions about buying and selling tenanted property, please do feel free to get in touch, and we hope to see your comments on this consultation paper soon.
Written by Chris Wood, MD & Founder of Portolio
Get in touch on 07812 164 842 or email [email protected]
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